Magazine Luiza (MGLU3) jumps 60% in January and leads Ibovespa; time to buy?

The market understood that Magazine Luiza will benefit the most from the collapse of the company in judicial recovery (Image: Reproduction/Youtube)

THE Magazine Luiza (MGLU3) shone in January, with an increase of 60%, rising twice as much as the second placed, the CSN Mineração (CMIN3).

The action became a seesaw in relation to the Americans (AMER3): While the role of the retailer turned to dust, rising from R$10 to the current R$1.75, Magazine rose.

The market understood that the Luiza Trajano will benefit the most from the collapse of the company in judicial recovery.

See the biggest gains of the month

See the biggest drops of the month

Would this be the time to buy Magazine Luiza?

Even with the jump, analysts don’t feel comfortable recommending the shares of the Magazine Luiza. Gustavo Cruz, from RB Investimentos, says that the company is still going through the same difficulties as before.

“The operating result may even be better, but it will be compromised by the financial part. It went into debt when the interest rate was less than 2%, but now that debt burden is very heavy on the company. It will not be one of the highlights of the year”, he predicts.

Leandro Petrokas, from Quantzed, says that after such a strong increase in such a short period of time, “I don’t think it’s a good time to buy”.

“It would still be too early to point out the Magazine Luiza as the real beneficiary of the case Americans. Perhaps we are moving a little too far. I would wait some time for the unfolding of the Americanas case”, she observes.

Rodrigo Cohen, CNPI analyst and co-founder of Escola de Investimentos, mentions retail risks. “How many times, without any reason, has this stock gone up? It’s not worth the risk,” he reckons.

Finally, analysts Earth say that as the outlook is still uncertain, it is risky to invest in the retail sector.

“Interest rates should continue to pressure companies and inflation could have a negative effect on sales. Therefore, the most defensive sectors or those with less exposure to interest rates and inflation should continue to be preferred in the market”, he adds.

Earlier, the XP Investimentos reviewed the theses of retailers, including the Magazine Luizaand raised the company’s target price from Luiza Trajano from BRL 4.5 to BRL 5, a potential increase of 13% compared to the last closing price. Despite this, the rating remains neutral.

To the XP market share gains from the restructuring of AMER are priced, after an increase of 60% of shares in the accumulated of the year.

Why did CSN Mineração go up?

already the CSN Mineração rose in the wake of China’s reopening. The BofA, for example, raised shares of CSNA3 and its subsidiary CMIN3 to “buy” with the change in iron ore price dynamics.

Another house that is optimistic, the Bradesco BBI also assesses that the mining arm of the CSN will have a stronger operating environment after last year’s challenges. In the assessment of the analysis team, the company will surf on volume recovery and will benefit from lower freight and energy costs.

“We think that CSN Mineração will also take advantage of the good moment in the short term, supported by a stronger environment for iron ore prices”, evaluate Thiago Lofiego and team.

In addition, the company stands out to analysts as a payer of dividends robust, with the remuneration policy intact (80-100% payout).

“Under our estimate of BRL 7.5 billion for Ebitda in 2023 (40% above consensus), CSN Mineração is traded at 3.5 times EV/Ebitda (company value over Ebitda), with a cash flow yield of free cash of 11% and 14% of dividend yield“, comments the BBI.

Source: Moneytimes

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