O Harvest Bank raised the recommendation of Locate (RENT3) from neutral to purchase with a target price of R$ 71.20, an increase of 29.78% compared to the closing of this last Friday (3rd).
The improvement in expectations for the paper came amid the company’s results for the last quarter, updated macroeconomic assumptions and the increase in estimates for the company’s future results, especially considering the recent jump in vehicle prices and rising interest rates.
Another point is that the analyst claims that the rise in interest rates and vehicle prices will make the company continue to increase rates in order to maintain healthy returns, although this could reduce the speed of growth in the sector going forward.
“However, we still believe that Localiza will be able to increase its earnings in the next two years with reliable growth paths in its ecosystem”, says Cauê Pinheiro, who signs the report.
The specialist also listed some reasons that could trigger the action, such as the performance of quarterly results, changes in interest rates and approval of its merger with Unidas, which is subject to approval by CADE (National Agency for the Defense of Competition).
Finally, Pinheiro calculated that the stock is attractive as it trades at 19.3 times the price-to-earnings multiple, 28% below the analyst’s implicit multiple of 26.8 times.
Source From: Moneytimes
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