Brazil's low P/E ratio hints at 29% upside post-2026 election, boosting Brazilian ETFs like EWZ and FLBR.

Brazil's current price-to-earnings (P/E) ratio of 12.5x is significantly lower than the emerging markets average of 16.2x, suggesting a potential 29% upside if a market re-rating occurs after the 2026 election. Key factors supporting this opportunity include the expected opposition victory, Brazil's leverage in hard assets like oil and iron ore, and attractive valuations. However, risks such as political uncertainty around Lula, judicial influence, and historical underperformance at similar P/E levels require careful monitoring. The analyst reiterates a buy rating on Brazilian asset ETFs, particularly EWZ and FLBR, positioning them as compelling investments for 2026.