B3 Shares Leap 8% After Tax Victory; BTG Upgrades Rating

B3, Brazil’s stock exchange operator, saw its shares jump 8.57% to R$11.40 on Thursday after winning a critical R$5.77 billion ($962 million) tax dispute.

The Administrative Council of Tax Appeals (Carf) ruled unanimously in B3’s favor, ending a legal battle that began in 2019. The dispute centered on goodwill amortization from B3’s 2008 incorporation of Bovespa Holding.

The tax authority had questioned the fiscal treatment of this goodwill for tax years 2014-2017. This victory significantly reduces B3’s contingent liabilities.

BTG Pactual responded by upgrading B3 shares to “buy” with a R$13.50 target price. Goldman Sachs maintained its “buy” recommendation with a R$12 price target. Both firms cited the substantial reduction in tax risk as a positive catalyst for the stock.

The financial impact of this decision proves substantial. B3 started 2024 with approximately R$14 billion ($2.3 billion) in potential tax claims. This figure dropped to R$5.3 billion ($883 million) by March 2025.

The net risk now stands at roughly R$3 billion ($500 million), representing a 78% reduction in contingent liabilities. Analysts praise B3’s business diversification and resilience.

B3’s Expansion into Cryptocurrency and Market Stability

Brazilian equities now contribute less to the company’s overall results, making the business more stable. This diversification strategy extends to cryptocurrency markets as well.

B3 plans to launch Bitcoin options plus futures contracts for Ethereum and Solana later this year. Their existing Bitcoin futures already generate approximately R$5 billion ($833 million) in monthly trading volume.

The stock currently trades at historically low multiples despite improved earnings quality. B3 offers an expected capital return yield of about 10% through dividends and share buybacks. This positions the company as a relatively defensive option among higher-risk Brazilian stocks.

Investors view this tax victory as removing a significant uncertainty that had weighed on B3’s valuation. The ruling confirms the company followed Brazilian tax legislation properly regarding the goodwill establishment.

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