XP downgraded its Lojas Renner suggestion from ‘purchase’ to ‘impartial’ primarily on account of above-average temperatures within the second quarter.
The dealer additionally revised the dealer’s value goal from R$19 to R$18 – which means up 22% energy.
Despite the catastrophe in Rio Grande do Sul that affected the corporate in Rio Grande do Sul, XP analysts are trying on the warmth, which reduces gross sales of winter clothes, the place the corporate tends to have increased margins.
“A heat second quarter is already main Renner to count on reductions on winter collections, which might restrict the speed growth – even in comparison with the ‘weak’ base of 2023,” wrote analysts Danniela Eiger, Gustavo Senday and Laryssa Sumer.
XP expects same-store gross sales development of 0.2% from Renner within the second quarter, but in addition believes that the interval will be the starting of a downward revision of this 12 months’s earnings.
“Looking forward, forecasts proceed to level to excessive possibilities of above-average temperatures in June and July, which places Valentine’s Day gross sales in danger,” the analysts wrote.
Despite acknowledging that Renner stays discounted relative to historic ranges, XP doesn’t see good occasions for the corporate or the sector, with a cycle of gradual rate of interest cuts, rising meals inflation and a powerful greenback.
According to XP, what can alleviate this tough time is the approval of the Mover Project (Green Mobility) in Congress, with a ‘jabuti’ to refund the import tax on purchases of as much as US$50, which may immediately have an effect on Asian opponents.
“According to our political workforce, the possibilities of the mission’s passage appear increased than in earlier discussions, nevertheless it nonetheless relies upon quite a bit on how the federal government votes,” the analysts wrote.