Magazine Luiza topples 9% after news of reduction in sales estimates – Money Times

Magalupay Magazine Luiza
YipitData downgraded the company’s sales growth estimates for the third quarter (Image: Divulgação/Magazine Luiza)

The actions of the Magazine Luiza (MGLU3) collapsed 8.86%, quoted at R$ 17.18, this Friday (10).

The fall, which was the worst of the day on the Stock Exchange, happened after the agency Bloomberg report that YipitData has downgraded estimates for the company’s third-quarter sales growth.

O Ibovespa (IBOV) closed in fall this friday, accumulating another negative week, marked by strong volatility and in which it renewed its low in six months, with the spotlight focused on the political-institutional scenario in the country.

President’s Statements Jair Bolsonaro demonstrations on Independence Day, attacking ministers of the Federal Supreme Court (STF) and threatening to fail to comply with court orders, triggered a strong risk aversion in the market.

On Wednesday, the Ibovespa sank nearly 4% as comments raised the temperature in Brasília and fueled concerns about the advancement of the economic agenda, in particular matters related to the fiscal framework.

At the close, the Ibovespa fell by 0.93%, to 114,285.93 points, in the low of the day, accumulating a loss of 2.26% in the week and 3.78% in the month. In the year, the drop is now 3.98%.

What makes Magazine Luiza one of the most prepared retailers in Brazil?

Although paper is not so cheap, the Magazine Luiza has the potential to generate a lot of value for shareholders, in addition to being one of the most prepared companies in the retail segment, points out Itaú BBA in a report sent to clients and obtained by Money Times.

According to the broker, the company’s shares trade at a 1.5x EV/GMV (Firm Value Over Commodity Value) of 1.5 times, “which, while not a bargain, can see a rapid multiple contraction driven by solid growth and margin expansion in the coming years”.

BBA resumed coverage of Magalu shares with a purchase recommendation and a target price of R$24.

(With Reuters)

Did you like this news? Download our app to read, in just one click, this and more than 150 articles daily.