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Goldman Sachs upgrades Brazil's XP, cuts rating on B3 on shifting risk-reward
Goldman Sachs upgrades Brazil's XP, cuts rating on B3 on shifting risk-reward

Yahoo

time6 days ago

  • Business
  • Yahoo

Goldman Sachs upgrades Brazil's XP, cuts rating on B3 on shifting risk-reward

-- Goldman Sachs upgraded Brazilian brokerage XP (NASDAQ:XP) Inc to 'Buy' from 'Neutral' saying the company has a stronger operating leverage, its revenue mix, and potential upside incase interest rates fall faster than expected. The bank raised its price target for XP to $23 and said the firm's reduced reliance on equity market performance, along with steady fixed income revenue growth, puts it in a favorable position for consistent low double-digit revenue growth. 'XP has become less dependent on a further market recovery,' Goldman wrote, pointing to a shift in its revenue composition. Fixed income revenues overtook equities as XP's largest source in the first quarter, with equity revenues down to 21% from over 40% in 2021. In a bull case scenario, revenue could grow 21% in 2026 versus a base case of 11%, the bank said. Goldman also highlighted XP's strong capital position, which should support further buybacks and dividends. It projects 16% earnings growth in 2026 under its base the brokerage downgraded exchange operator B3 SA to 'Neutral' from 'Buy', saying limited room for further margin expansion and potential overhang from competition and lawsuits cap upside. B3's EBITDA margin already ranks among the highest globally at 70%, and its shares are trading at a steep premium to Brazil's Ibovespa index. Further upside from here could be more dependent on a sustained equity market recovery, according to Goldman analysts. Goldman maintained its 'Buy' rating on BTG Pactual, calling it the most resilient earnings story in the group. The brokerage sees the overall environment improving for capital markets, but believes XP offers better risk-reward relative to peers. Related articles Goldman Sachs upgrades Brazil's XP, cuts rating on B3 on shifting risk-reward Bernstein starts coverage of entertainment stocks: Spotify and TKO at Outperform Buy the dip in Kenvue stock: Jefferies Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

JBS plan for US listing in doubt, early shareholder vote shows
JBS plan for US listing in doubt, early shareholder vote shows

Reuters

time23-05-2025

  • Business
  • Reuters

JBS plan for US listing in doubt, early shareholder vote shows

SAO PAULO, May 22 (Reuters) - An early count of JBS ( opens new tab shareholder votes released on Thursday showed a slim majority opposed to the Brazilian meatpacker's proposal to list shares in the United States, threatening a move that has driven a sharp rally by its shares. In a securities filing, the company released a voting bulletin showing about 52% of votes so far opposed the plan, underscoring that the decision will go down to the wire at a Friday shareholder meeting that will tabulate outstanding votes. JBS shares have surged over 30% since mid-March as stock analysts touted the perks of a U.S. listing for its valuation. Shares seesawed on Thursday before slipping about 2% in midday Sao Paulo trading. Some JBS investors have been buying more shares to sway the final vote, according to people familiar with the matter. "I believe the breakdown of voting tomorrow will be more favorable, because it will be local institutional investors and individuals here in Brazil who have been more supportive of this move," said Leonardo Alencar, an analyst at brokerage XP. Plans for a U.S. listing were delayed repeatedly over the past decade, hindered by scandals involving the company's top shareholders, brothers Joesley and Wesley Batista, as well as concerns about its environmental impacts and the transparency of its climate targets. Since the U.S. Securities and Exchange Commission gave its approval for the New York listing in late April, environmental groups and U.S. politicians have aired concerns. Thursday's filing showed some 271 million votes against the proposal to delist shares in Sao Paulo to create a dual U.S.-Brazil listing via a Netherlands-based entity. The question had 246 million votes in favor and over 3 million abstentions. At a shareholder meeting on Friday, JBS is expecting to tabulate up to 210 million more minority shareholder votes, according to a person familiar with the process, who said those votes could swing the result in favor of the company's plan. If approved, JBS shares will trade on the New York Stock Exchange as well as on the Sao Paulo bourse, called B3, via Brazilian depositary receipts. The Batista family and state lender BNDES, which together hold about two-thirds of shares, are not voting on the proposal, leaving the decision in the hands of minority investors. Recent recommendations by proxy advisory firms Glass Lewis and Institutional Shareholder Services may have swayed those investors' votes. Both questioned the structure of the listing, warning it could end up weakening minority shareholder rights. Under the proposed structure, a Netherlands-based company will issue Class A shares, which will be publicly traded, and Class B shares, which will have 10 times as much voting power. In one potential scenario, the controlling shareholders of JBS could end up with 85% of voting power. JBS defended the proposed structure, telling shareholders in a letter that ISS had failed to recognize the strategic value of the controlling shareholders in establishing a leading position in the global meat industry. The back-and-forth was enough to raise doubts about the proposal's passage even before Thursday's preliminary count. JPMorgan analysts recommended last week that investors hedge a potential rejection by buying JBS put options, given slipping odds of approval, which previously were "very favorable." The analysts warned in their note that, although approval still looked likely, a rejection could wipe out a two-month rally since BNDES said it would abstain from the vote. Igor Guedes, an analyst at Genial Investimentos, said since the ISS recommendation against the dual listing, foreign investors had increased their holdings while Brazilian investors reduced their exposure. That may increase the risk of rejection, he said, as foreign funds seem more open to the proxy advisories' recommendations.

XP Inc.A (XP) Tops Q1 Earnings Estimates
XP Inc.A (XP) Tops Q1 Earnings Estimates

Yahoo

time20-05-2025

  • Business
  • Yahoo

XP Inc.A (XP) Tops Q1 Earnings Estimates

XP Inc.A (XP) came out with quarterly earnings of $0.39 per share, beating the Zacks Consensus Estimate of $0.38 per share. This compares to earnings of $0.37 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 2.63%. A quarter ago, it was expected that this company would post earnings of $1.39 per share when it actually produced earnings of $0.38, delivering a surprise of -72.66%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. XP Inc.A , which belongs to the Zacks Financial - Miscellaneous Services industry, posted revenues of $740.99 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 4.55%. This compares to year-ago revenues of $818.21 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. XP Inc.A shares have added about 57.2% since the beginning of the year versus the S&P 500's gain of 1.4%. While XP Inc.A has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for XP Inc.A: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.39 on $803.44 million in revenues for the coming quarter and $1.60 on $3.25 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Miscellaneous Services is currently in the bottom 45% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the broader Zacks Finance sector, Eagle Point (ECC), has yet to report results for the quarter ended March 2025. The results are expected to be released on May 28. This management investment company is expected to post quarterly earnings of $0.26 per share in its upcoming report, which represents a year-over-year change of -10.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Eagle Point's revenues are expected to be $52.95 million, up 29.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report XP Inc. (XP) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research

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