Lula's surprise win puts TIM, Poste and Stellantis in focus as Brazil's real slides

Brazil's President Luiz Inácio Lula da Silva won a fourth term with 51.79% of votes, and the surprise result sent the Brazilian real sharply lower on 26 October 2026. Brazilian stocks were set to open sharply down, putting Italian listed groups with large Brazilian earnings in the spotlight.

The reaction matters for investors in Milan because several Italian blue chips draw a sizeable share of profit from Brazil. According to UCapital's coverage, Telecom Italia, Poste Italiane and Stellantis are the most exposed, followed by Buzzi, Enel, Terna and Pirelli.

What happened

Lula's re-election was the trigger for a reversal in Brazilian assets. Lula thanked voters, particularly young people, for supporting democracy, and said the country had overcome foreign interference through digital platforms. He pledged to govern for all Brazilians.

The opposition candidate, Flávio Bolsonaro, called the election unacceptable, alleged that the rules had been changed during the process and vowed to seek legal action to annul the results. India's Prime Minister Narendra Modi was among those congratulating Lula, saying he wanted to strengthen the India-Brazil Strategic Partnership.

On the market side, the Brazilian real gave back its recent gains, according to UCapital's coverage, and Brazilian stocks were expected to open sharply lower on 26 October. A US market report published that day carried the headline that Brazilian stocks were set to drop after Lula's surprise win.

Which Italian companies are most exposed to Brazil?

The exposure of Italian listed companies to Brazil varies widely, according to UCapital's estimates. The figures below are shares of group metrics:

• Telecom Italia: Brazil is around 45% of group EBITDA and market cap.

• Poste Italiane: the stake in TIM Brazil is worth about 12% of the combined market cap; Brazil is around 20% of group EBIT.

• Stellantis: Brazil is 11% of group sales and about 37% of group EBIT.

• Buzzi: Brazil generates around 12% of group EBITDA.

• Enel: Brazil is worth around 8.5% of group EBITDA.

• Terna: Brazilian concessions are worth around 8% of group EBITDA.

• Pirelli: Brazil contributes around 10% of sales and about 5% of EBIT.

Why are Telecom Italia and Poste linked?

UCapital's coverage considers the Telecom Italia share linked to the Poste Italiane share price after the recent public exchange offer. For that reason it expects the reaction in Telecom Italia to follow Poste's overall exposure rather than Brazil alone. TIM S.A., the Brazilian unit, issued a notice on Poste's public offer for Telecom Italia, saying there was currently no concrete impact or operational effect on the Brazilian company.

Market data show Telecom Italia reported quarterly earnings per share of 0.04 against an estimate of 0.09. Poste Italiane reported EPS of 0.47 against an estimate of 0.51, on revenue of 3.87 billion against an estimate of 3.81 billion. Poste's trailing price-to-earnings ratio is 13.11 and its forward ratio 14.24.

How did markets react?

The real's sharp reversal and the expected fall in Brazilian equities are the main market facts reported so far for 26 October. The sources do not give closing levels for the real or the Ibovespa, so the size of the move cannot yet be stated. The brief describes the Brazilian stock market as expected sharply down at the open.

For Italian stocks, no price moves are available in the material gathered. UCapital's coverage frames the exposure in terms of earnings weight, a guide to which shares may be most sensitive to a weaker real. A lower real reduces the euro value of earnings generated in Brazil, which is why companies with high shares of EBIT or EBITDA from the country stand out.

Why it matters

The Brazilian result matters because the exposure of some Italian groups is large relative to their size. Stellantis stands out on profit: Brazil is 11% of sales but about 37% of group EBIT, according to UCapital's estimate. That gap means the country contributes far more to earnings than to revenue.

Telecom Italia is the most concentrated case, with about 45% of EBITDA and market cap tied to Brazil. Poste's holding in TIM Brazil adds an indirect channel, worth about 12% of the combined market cap. Utilities and infrastructure names such as Enel and Terna have smaller shares, at around 8.5% and 8% of EBITDA respectively.

What are the risks and counterpoints?

The outcome is not settled in political terms. Bolsonaro's vow of legal action to annul the results adds uncertainty about the transition. Earlier fiscal friction is also part of the background: in July, Brazil's Supreme Court Justice Alexandre de Moraes called a mediation hearing on 15 July between the government and Congress over a dispute on a tax hike.

The reported exposure figures are analyst estimates, not company disclosures, and the reaction in shares may differ from the earnings weights. A rebound in the real or a calmer session could also change the picture. Earlier moves in Brazilian assets after Lula's previous election were described as a volatile session in which assets rallied, showing that first reactions can reverse.

What to watch next

The next steps depend on the political and market follow-through in Brazil. The sources name no dated data releases, so the following are the developments that have been flagged:

• Whether Flávio Bolsonaro files the legal challenge he announced to annul the result.

• The level of the Brazilian real and the Ibovespa once trading is under way after 26 October.

• Any further notice from TIM S.A. or Telecom Italia on Poste Italiane's public offer.

• Any fiscal policy signals from Lula's government as it forms its next term.

Italian groups' next quarterly updates will show how a weaker real, if it persists, feeds into reported earnings from Brazil.