BTG analysts not only reiterated their buy recommendation for Simpar's shares (SIMH3) but also raised their target price from R$ 10 to R$ 17, following the company's event with investors. The holding's shares closed the last trading session quoted at R$ 12.06, implying an upside potential of 41%.
Simpar is the parent company of large logistics and transportation companies, such as Movida (MOVI3) and JSL (JSLG3), and is valued at R$ 10.1 billion - 34% below its net asset value (NAV) according to BTG's accounts.
"We struggle to understand the reasons for such a large holding discount," the analysts said in a report. The lower liquidity of the shares, with only 35% of free float, financial leverage and a certain lack of market knowledge about the holding company's new fronts could be behind the large discount, according to BTG.
""We believe investors will need to better understand the construction of the new growth platforms first (utilities, infrastructure, waste, management, banking, etc.) before adjusting valuation.""
"The market is turning a blind eye to the construction of one of the largest corporations in the country. Simpar is becoming one of the largest holding companies and capital allocators in Brazil," said the analysts. "The reiteration of our buy recommendation shows that we disagree with this market view."
BTG changes projections for Movida and JSL
BTG also took advantage of Simpar's meeting with investors to update the target price of the companies under the holding company's control.
Movida, one of Simpar's main drivers, had its buy recommendation reiterated and its target price adjusted from R$ 27 to R$ 28, representing upside potential of 55%.
"Movida reinforced its pioneering spirit in innovative and sustainable rental solutions, with the launch of imported vehicle rentals, electric cars and web check-in."
JSL's shares, however, had their target price revised downwards, from R$ 16 to R$ 12. Macroeconomic conditions, such as higher interest rates and expectations of weaker GDP, weighed negatively on the analysts' assessment. Even so, the upside is more than 80% compared to the last closing price of R$ 6.60.
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