With its own ‘Mail’ and games, Magazine Luiza (MGLU3) can go up almost 30% on the stock market, says Itaú BBA

Amid discussions about the privatization of Correios, Magazine Luiza (MGLU3) decided not to wait. The electronic retail giant announced that it intends to operate its network of physical stores as “postal agencies” to receive and collect orders from customers who shop online.

The bold logistics plans, together with the recent acquisition of KaBuM!, which placed the company in the gaming world, led Itaú BBA to resume coverage of Magalu’s shares with a purchase recommendation.

The target price was set at BRL 24 per share at the end of 2022. The value represents a potential increase of 27.7% compared to yesterday’s close, when Magalu’s shares (MGLU3) reached the end of the session in B3 quoted at R$18.79.

The bank’s analysis seems to reflect the retailer’s ability to continue to surprise the market both in terms of strategy and results. Since the end of 2015, Magalu shares have accumulated an impressive increase of more than 26,000%.

“In view of the recent follow-on of the acquisition of KaBuM! and in terms of logistical guidance and in the fintech sector, we are reevaluating our estimates at the same time as we are trying to anticipate the company’s next steps”, informs Itaú BBA in a report.

Speaking of stock market giants, it is also worth noting that XP analysts assess potential for an increase in Weg (WEGE3), considered by some analysts to be the largest company on the stock exchange. Check out 4 pillars for this on our Instagram and take the opportunity to follow our profile (just click here). There we deliver to readers investment analyses, news relevant to your wealth, stock market buying opportunities, career insights, entrepreneurship and much more:

Returning to Magalu, the acquisition of KaBum!, priced in the billions, is the largest ever made by Magalu to date. For Itaú BBA, the deal signals that future Magalu initiatives may take place in the promising gaming segment.

The bank also highlights Magalu’s plans for e-commerce logistics, which include doubling storage space to 2 million square meters by 2023.

The retailer also intends to transform its network of physical stores into “postal agencies”. These spaces should be used as delivery centers and a place for sellers and customers to leave and pick up products sold on the company’s platform (marketplace).

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For analysts, the successful execution of this plan is one of the main triggers for Magazine Luiza’s growth — and also the biggest risk.

At the same time, the insertion of Magalu in the fintech market is seen by Itaú BBA as a good opportunity for the company to profitably expand its service offer to sellers registered in its marketplace.