NEW YORK (TheStreet) -- Itau Unibanco (ITUB) fell Tuesday after Zacks downgraded the stock to "neutral" from "outperform" and set a $16 price target.
"We have downgraded our long-term recommendation on Itau Unibanco to Neutral based on the company's undisciplined expense management reflected in the first-quarter 2014 results. However, recurring earnings were up year over year," the firm wrote in a research note. Elevated banking service fees, income from banking charges and a rise in the managerial financial margin were the positives.
"We believe the company's diversified product mix, increasing operating revenues and expanded credit portfolio are encouraging. Moreover, the recent merger with CorpBanca will help enhance Itau Unibanco's footprint in Chile. However, increasing competition, elevated expenses and stressed conditions in the Brazilian economy pose risks."
The stock was down 2.51% to $14.75 at 11:26 a.m.