Latin America Emerges as JPMorgan’s 2026 Investment Spotlight
Table of Contents
- 1. Latin America Emerges as JPMorgan’s 2026 Investment Spotlight
- 2. Key country and stock ideas at a glance
- 3. What to watch in 2026
- 4. Two evergreen insights for readers
- 5. Early takeaways for 2026
- 6. Practical Tips for Cross‑Country Stock Selection
- 7. Benefits of a Country‑by‑Country Stock Framework
- 8. Real‑World Example: 2025‑2026 EV Surge
In a breakaway 2026 outlook, a major global bank lines up a bold rotation toward Latin America. The thesis rests on a constructive view of emerging markets, aided by a softer dollar, a more flexible Federal Reserve, and a global appetite for strategic commodities. The message: valuations ther lag developed markets, offering differentiated opportunities as reforms gain traction.
The strategy blends macro considerations wiht market dynamics. With global growth projected near 3% and inflation tame, flows into emerging-market assets could strengthen. A 2026 scenario of rate cuts and a stable policy stance from the U.S. Fed would further depress the dollar, boosting appeal for Latin American carry trades. Structural reforms in countries like Argentina, Brazil, and Chile are seen as catalysts for portfolio reallocation toward the region.
Observers note that global fund exposure to emerging assets remains modest, creating room for margin expansion in key sectors and a potential recovery led by underowned markets.
Key country and stock ideas at a glance
| Country | Stock (ticker) | recommended Action | Target price | Rationale |
|---|---|---|---|---|
| Brazil | Nubank (NOT) | Buy | US$18 (Dec 2026) | Scale, profitability, and regional expansion; ROE above 70% with ample capital; valuation supports upside. |
| brazil | CSN Mineração (CMIN3) | Sell | — | Macro headwinds for iron ore; the commodity is unlikely to benefit from the 2026 scenario. |
| Mexico | Cemex (CX) | Buy | US$10.50 | Cash-generation strength; improving free cash flow; investment-grade status supports broader investor demand. |
| Peru | Credicorp (BAP) | Buy | US$310 | Dominant market position; rising digital contribution; favorable growth trajectory. |
| Peru | Cementos Pacasmayo (CPACASC1) | Sell | US$7.50 | High multiple versus regional peers; growth prospects limited by valuation premium. |
| Chile | Itaú Chile (ITAUCL) | Buy | CLP 18,100 | Trading well below book value; group support from Itaú Unibanco; compelling discount to fair value. |
| Chile | CMPC | Neutral | CLP 1,400 | Operational challenges; intense competition; uncertain debt reduction path. |
| Colombia | Grupo Éxito (EXITO) | Hypothetical Buy | — | Strong margin improvements and store expansion; cash-flow enhancement would attract broader investors if exposure existed. |
| Colombia | Ecopetrol | Neutral | COP 1,970 | Oil context and capex plans cap upside; limited attractiveness under a refined macro view. |
| Argentina | Grupo Galicia (GGAL) | Buy | US$75 | undervalued credit penetration; potential macro normalization and index inclusion catalysts; solid positioning. |
| Argentina | Banco Supervielle (SUPV) | Neutral | US$12 | Lower capitalization and higher consumer-credit exposure; limited near-term upside due to capital constraints. |
Across the region, JPMorgan stresses that Latin America presents an appealing profile within emerging markets, characterized by a discount to developed markets, projected earnings growth in the mid-single digits for 2026, and the upside from a weaker dollar. The bank also notes that regional reforms and a more flexible monetary stance could amplify returns, even as sector-specific risks remain.
What to watch in 2026
Investors should monitor the pace of global growth, the trajectory of U.S. rate cuts, and the dollar’s strength against regional currencies. the path of commodity prices,domestic reforms,and the pace of credit normalization in Argentina and brazil will shape the turning points for many stocks highlighted here. A diversified approach, focusing on earnings resilience and cash generation, could help weather regional volatility while capturing latent upside from underowned markets.
Two evergreen insights for readers
First, a softer dollar tends to lift carry trades and attract capital to commodity-linked regions, possibly widening margins for consumer lenders and banks with strong balance sheets. Second, reforms that improve financial inclusion, digital banking, and credit penetration can lock in durable growth beyond cyclical swings, particularly in Brazil, Argentina, and Peru.
Early takeaways for 2026
Latin America’s appeal hinges on selective bets rather than broad exposure. A mix of high-ROE fintechs, cash-generative diversified lenders, and value-driven industrials could offer a balanced path through a year of macro uncertainty and policy shifts. As reform momentum continues, investors will weigh valuations, earnings quality, and the region’s sensitivity to global cycles.
Readers, which LatAm stock do you find most compelling for 2026, and why?
Do you expect the U.S. dollar to remain weak in the coming year, and how would that influence your regional allocations?
Disclaimer: Investment involves risk. This article provides general facts and is not personalized financial advice.
share your thoughts in the comments below and stay tuned for continuing coverage as market dynamics unfold.
United States – Preferred Stocks
Tech and consumer‑discretionary leaders continue to dominate the S&P 500
- apple (AAPL) – Strong earnings growth, expanding services revenue, and a resilient ecosystem.
- Microsoft (MSFT) – Cloud‑first strategy,AI integration across Office and Azure,and a solid dividend yield.
- Alphabet (GOOGL) – Dominant search advertising, rapid AI‑driven product rollout, and a diversified “Other Bets” portfolio.
United States – Stocks to Avoid
- Highly leveraged retail chains (e.g., lagging brick‑and‑mortar stores still battling e‑commerce competition).
- Biotech firms without FDA‑approved products – high volatility and cash‑burn risk in 2026’s regulatory climate.
- Companies exposed to heavy carbon‑intensive operations that lack a clear transition plan (e.g., legacy coal miners).
Canada – Preferred Stocks
Financials and clean‑energy infrastructure lead the market
- royal Bank of Canada (RY) – Robust balance sheet, expanding wealth‑management segment, and dividend growth streak.
- Enbridge Inc. (ENB) – Renewable pipeline projects, stable cash flow, and a progressive ESG roadmap.
- Shopify (SHOP) – Global e‑commerce platform with strong merchant ecosystem and AI‑enhanced logistics tools.
Canada – Stocks to Avoid
- Oil‑sand producers without diversification – rising carbon pricing and ESG pressure are eroding margins.
- Small‑cap mining explorers lacking proven reserves; market speculation has spiked volatility.
United Kingdom – Preferred Stocks
- AstraZeneca (AZN) – Post‑COVID vaccine pipeline, strong oncology pipeline, and strategic partnerships in China.
- HSBC Holdings (HSBC) – global banking footprint, expanding wealth‑management services in Asia, and a solid dividend yield.
- National Grid (NG) – Infrastructure investment in renewable energy transmission and stable regulated cash flows.
United Kingdom – Stocks to avoid
- Legacy tobacco firms facing declining global consumption and increasing regulatory fines.
- High‑debt real‑estate developers operating in markets with tightening mortgage rates.
Germany – Preferred Stocks
- Siemens (SIEGY) – Industrial automation, digital twin technology, and a growing renewable‑energy portfolio.
- SAP (SAP) – Cloud‑first ERP solutions, AI‑driven analytics, and strong recurring‑revenue model.
- Allianz (ALV) – Diversified insurance and asset‑management business with a focus on sustainable investing.
Germany – Stocks to avoid
- Automakers lagging on EV transition – firms still reliant on internal combustion engines without clear electrification timelines.
- Mid‑size banks with exposure to non‑performing loans in Eastern European markets.
France – Preferred Stocks
- LVMH (LVMUY) – Luxury conglomerate benefiting from high‑margin products and expanding Asian consumer base.
- Dassault Systèmes (DASTY) – 3D‑design and simulation software, strong AI integration, and recurring subscription revenue.
- TotalEnergies (TTE) – Growing renewable‑energy assets, dividend continuity, and strategic hydrogen projects.
France – Stocks to Avoid
- Traditional utilities with limited green‑energy commitments – lower growth outlook under EU decarbonization mandates.
- Airlines still heavily dependent on short‑haul routes amid rising fuel taxes.
Japan – Preferred Stocks
- Toyota (TM) – Leading hybrid and hydrogen‑fuel cell technologies, aggressive EV rollout, and strong domestic market share.
- SoftBank Group (SFTBY) – Diversified tech‑investment portfolio, AI venture fund performance, and strategic partnership with Arm.
- Tokyo Electron (TOELY) – Semiconductor equipment leader benefiting from global chip shortage recovery.
Japan – Stocks to Avoid
- Retail chains with shrinking foot traffic and limited e‑commerce integration.
- Companies heavily reliant on aging domestic consumer base without overseas expansion.
China – Preferred Stocks
- Tencent (TCEHY) – Dominant digital ecosystem, gaming revenue resilience, and expanding fintech services.
- BYD Company (BYDDY) – Leading EV manufacturer, strong battery supply chain, and government support for green transport.
- Kweichow Moutai (600519.SS) – Premium liquor brand with high operating margins and robust domestic demand.
China – Stocks to avoid
- Property developers with high debt ratios after the 2024 market correction.
- Export‑driven manufacturers facing prolonged trade‑policy uncertainty with the U.S. and EU.
India – Preferred Stocks
- Reliance Industries (RELI.NS) – Diversified energy-to-digital transition, strong retail network, and high‑growth telecom arm Jio.
- Infosys (INFY.NS) – Consistent earnings, AI‑augmented consulting services, and strong client retention.
- HDFC Bank (HDB.NS) – Low NPL ratios,expanding digital banking platform,and attractive dividend yield.
India – Stocks to Avoid
- Small‑cap steel firms impacted by global overcapacity and import duty volatility.
- Agricultural commodity traders facing price volatility due to unpredictable monsoon patterns.
Brazil – preferred Stocks
- Vale (VALE) – World‑leading iron‑ore producer, strong cost discipline, and increasing focus on ESG reporting.
- Itaú Unibanco (ITUB) – Leading financial services group with solid digital banking growth and diversified revenue streams.
- Petrobras (PBR) – Improving profitability through cost‑cutting, focus on offshore pre‑salt fields, and gradual renewable investments.
Brazil – Stocks to Avoid
- Oil exploration companies without proven reserves amid Brazil’s stricter environmental licensing.
- Retail chains heavily exposed to hyperinflation without effective pricing power.
South Africa – Preferred stocks
- Sasol (SOL) – integrated chemicals and energy producer shifting toward green hydrogen and renewable fuels.
- Naspers (NPN) – Global internet investment portfolio,strong presence in e‑commerce and fintech through its Chinese stake.
- FirstRand (FSR) – Robust retail banking network, focus on digital transformation, and stable dividend track.
South Africa – Stocks to Avoid
- Mining entities with high exposure to coal facing international divestment pressure.
- Companies with meaningful sovereign‑risk exposure due to fluctuating rand value.
Practical Tips for Cross‑Country Stock Selection
- assess ESG Alignment – Markets with strong carbon‑pricing frameworks (EU, canada, Japan) reward companies that demonstrate clear sustainability roadmaps.
- Diversify by Sector and Geography – Pair defensive utilities with high‑growth tech or biotech to balance volatility.
- Monitor Central‑Bank Policy – Interest‑rate hikes (U.S. Fed, ECB) can compress equity valuations, especially in rate‑sensitive sectors like real estate and financials.
- Use Currency hedging When Needed – For investors holding non‑USD assets, consider forward contracts or currency‑hedged ETFs to mitigate FX risk.
- Stay Updated on Regulatory Changes – 2026 saw new data‑privacy laws in the EU and tighter fintech licensing in India; such shifts can quickly affect profit margins.
Benefits of a Country‑by‑Country Stock Framework
- Targeted Risk Management – Local macro‑economic indicators (inflation, GDP growth) are easier to track and act upon.
- Opportunity Identification – Emerging‑market reforms (e.g., Brazil’s infrastructure plan) create pockets of outsized upside.
- Enhanced Portfolio Openness – Clear allocation by region simplifies performance attribution and reporting.
Real‑World Example: 2025‑2026 EV Surge
- Case Study: Tesla’s global market share grew 12 % in 2025, driven by new battery‑manufacturing plants in Germany and China.
- Implication: Investors who increased exposure to BYD and Siemens in Q1 2025 captured a combined 8 % total return versus the MSCI World index’s 4 % gain.
- Lesson: Aligning stock picks with macro trends (EV adoption, renewable energy policies) across multiple jurisdictions amplifies upside while diversifying country‑specific risk.