A Petrobras (PETR3; PETR4) reported that the price of aviation kerosene (QAV) will fall by 12.6% as of this Thursday (1) — accumulating a reduction of 35% in the year. The advertisement is yet another trigger for the actions of Blue (BLUE4) It is Goal (GOLL4), which are just at the beginning of a rally, analysts at the Itaú BBA.
In the accumulated of 2023, AZUL4 adds up to 65.8% in 2023, while GOLL4 appreciates 20.9%. Investors are gradually considering Brazilian airlines again, which should support the sector’s recovery, analysts say.
BBA has a target price of BRL 28 for Azul shares at the end of 2023, which implies a potential increase of over 66.2% in the year. The recommendation for the papers is outperform — that is, the assets must perform above the market average.
Azul is preferred by bank analysts in the sector. According to them, there is good visibility of the company’s restructuring plan, a low marginal cost of debt of 7.5% in dollars and an attractive EV/Ebitda of 5.4 times for 2024.
As for Gol, the rally should be shorter, analysts said. The company has a recommendation marketperform — in line with the market. BBA has a target of BRL 9 for the shares, which makes room for an appreciation of another 8.2% in 2023.
In today’s trading session, after Petrobras’ announcement, AZUL4 advanced 2.14%, quoted at R$ 17.21, and GOLL4 rose 0.48%, at R$ 8.36, around 10:50 am.
Why choose Blue?
Highlights for Azul are the restructuring plan and cash flow prospects, say Itaú BBA analysts.
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“Regardless of the details of the restructuring of the leasing, the general perception is that Azul managed to negotiate an assertive agreement with the lessors”, they say. The company should reduce cash outflow by at least BRL 1.9 billion in 2023 and BRL 1.2 billion in 2024.
Regarding the equity dilution risk, analysts point out that Azul may negotiate alternative measures if the share does not reach the agreed price of BRL 36 by the second half of 2024.
Compared to Gol, the potential equity dilution of the company’s restructuring remains a talking point among investors.
Source: Moneytimes
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