BB Investimentos reiterated a purchase recommendation for the shares of Vibrate (VBBR3), raising its target price. For BB analysts, part of the assessment is due to the good results presented in recent years, with a structural reduction in expenses and the recent recovery in the Ebitda margin (Earnings before interest, taxes, depreciation and amortization) in the retail segment.
According to BB, the company is going through a period of deleveraging, after reaching a net debt/EBITDA of 2.6x. “Our projection is that the indicator will reach 1.4x in 2024, opening space for possible new investments and increased dividend payments.”
Analysts still see the sector in difficult conditions, with compressed margins and limited volume. In this context, the Vibra’s strategy has been not to enter into a price dispute, but to ensure healthy margins, even at the expense of lower volumes.
“We see large companies making use of their more robust infrastructure to promote imports that complement Petrobras’ supply quota (PETR4), which can bring a combination of maintaining higher margin levels, but with better competitiveness”, explains the BB.
From this, the investment house recommends the purchase of Vibra shares and sets a target price of R$27.50 (previously R$27). The company’s shares are quoted at R$19.20.
Vibra: BB projects annual drop in net revenue
BB Investimento estimates that Vibra will have net revenue of R$161 billion in 3Q23, a reduction of 11% compared to 2022, due to lower oil prices and, consequently, oil derivatives.
However, there are prospects for gains in stock sales margins due to the rise in Petrobras’ derivatives prices, which should take the company’s EBITDA to R$4.8 billion, an increase of 7% on an annual basis, while the net profit should reach R$1.9 billion, growth of 23% compared to 2022.
“Vibra is being traded at 7.2x EV/Ebitda, compared to 6.2x the average of its peers (Ultrapar and Raízen), a premium of 15%, and at a multiple of 11.1x price/earnings, compared to 12.6x of peers, a 12% discount”, states BB.
Given this, BB analysts consider Vibra to have the best risk-return ratio in the sector. “Comerc, for example, accounted for 6% of EBITDA in 2Q23, and we expect that in the next two years this percentage will be closer to 20-25%.”
Net profit fell 81% in 2Q23
A Vibrate reported a net profit of R$133 million in the second quarter of 2023, a value 81.2% below that recorded in the same period last year, pressured by the drop in the value of oil on the international market and in the face of diesel imported from Russia, which increased competition in Brazil.
The volume of diesel imported into Brazil in the quarter was around 3.5 billion liters – and the Russian product represented around 55%.
A Vibra’s adjusted net revenue totaled R$37.36 billion in the period, a drop of 21% compared to the R$47 billion recorded a year earlier. The total volume sold in the period, however, was only 2% below the volume of a year ago, totaling 9.03 billion liters of fuel.
O Vibra’s EBITDA on an adjusted basis, it totaled R$910 million, an annual drop of 43.1%.
“The main reason for the increase in leverage was the adjusted EBITDA result for the period, which was impacted by a large inventory loss in the second quarter of 2023 as opposed to an inventory gain in the second quarter of 2022,” the company said in the release.
The company’s net debt totaled R$12.197 billion in the first half of the year, a value 8.3% lower than that recorded in the first six months of 2022. Leverage, measured by the relationship between net debt and adjusted Ebitda, was 3.0 times in the first half of the year. first half of this year, a value higher than that recorded in the same period of the previous year, by 2.8 times.
According to the statement, the Vibra’s 2Q23 was quite challenging as there was an intensification of the entry of diesel of Russian origin, practically replacing this hydrocarbon originating in the American gulf. With the strong price discount of the Russian product, the diesel from Russia became the main source of imported product in the Brazilian market.
“Vibra chose not to import the product throughout the quarter, as we focused on reinforcing our sourcing positioning in the national molecule and, with this, we prioritized our branded network, our contracted customers and operations that improve the company’s profitability”, pointed out the communicated.
Annual performance of Vibra shares
Price VBBR3
Graph generated on: 10/24/2023
1 year
