BLX

We rate FOREIGN TRADE BANK OF LATIN AMERICA, INC. (BLX) as a Hold with a composite score of 57.4/100 at a current price of $49.65. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in momentum (70th percentile) and stability (62th percentile), which together account for the majority of the composite score. Offsetting weakness in quality (28th percentile) and investment (54th percentile) tempers our overall conviction. We assign a No Moat rating (39/100), High uncertainty, and Standard capital allocation.

Key items to watch: balance sheet deleveraging progress. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

FOREIGN TRADE BANK OF LATIN AMERICA, INC. holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 57.4/100 places it at rank #967 in our full 7,333-stock universe. At $2.6B in market capitalization, FOREIGN TRADE BANK OF LATIN AMERICA, INC. is a mid-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

The outlook is moderately positive, with revenue expanding at 14% and favorable momentum (70th percentile) reflecting constructive market sentiment. The business shows steady execution, though the growth rate is below the levels typically associated with high-conviction growth stories. Momentum confirmation provides support for the current price level.

The margin cascade tells an important story: gross margins of 79% (+2.3pp vs sector) narrow to operating margins of 21% (+4.2pp vs sector) and net margins of 97.3%, yielding a gross-to-net conversion rate of 124%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $49.65, FOREIGN TRADE BANK OF LATIN AMERICA, INC. is trading near fair value based on current fundamentals. Our value factor score of 61/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at EV/EBITDA of 5.3x (discounted to peers), P/B of 1.4x, P/S of 2.2x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a High uncertainty rating to FOREIGN TRADE BANK OF LATIN AMERICA, INC.. Key risk factors include significant leverage (341% debt-to-equity), weak quality scores (28th percentile). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: significant leverage (341% debt-to-equity); weak quality scores (28th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 62th percentile and quality factor at the 28th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 79% provide a buffer against cost pressures; above-average stability (62th percentile) suggests predictable business dynamics; a 5.71% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate FOREIGN TRADE BANK OF LATIN AMERICA, INC.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 61.6%, and the balance sheet is managed within acceptable parameters (D/E: 341%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; FOREIGN TRADE BANK OF LATIN AMERICA, INC. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 5.71% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, FOREIGN TRADE BANK OF LATIN AMERICA, INC. receives a Hold rating with a composite score of 57.4/100 (rank #967 of 7,333). Our quantitative framework assigns a No Moat (39/100, trend: stable), High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 55/100.

Our analysis supports a neutral stance on FOREIGN TRADE BANK OF LATIN AMERICA, INC.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.