Magazine Luiza speaks after B3’s letter on stock decline

After suffering a drop of more than 8% in the last trading session friday (10) and after a consultation with the B3, O Magazine Luiza (MGLU3) commented on the performance of the roles.

In a statement, the retailer says it is unaware of any fact related to the drop in the price of papers, but attributes this movement to the news in general.

At the same time, the Magazine Luiza informed that already repurchased 14.4 million shares, within the plan to acquire up to 40 million papers announced last month.

THE share buyback is a common mechanism in publicly traded companies and can be used in various situations, from offering bonuses to entrepreneurs to holding the price during fluctuations in the Marketplace. The most common case is when the company believes its shares are undervalued.

The actions MGLU3 closed in high of 1.86%, quoted at BRL 17.50, but they rose more than 3% in the morning. We present, on our YouTube, a vision of Itaú BBA about the future of this action. Check it out below and take the opportunity to check out more in-depth analysis on the channel (just click here):

What does Magalu say

Among the news that, in the view of the Magazine Luiza, may have affected the quotes of MGLU3 there is an article by Valor Econômico about a “perfect storm” that should hit the sector of electronics, one of the strengths of retailer.

In addition, the company mentions the consultancy’s report YipitData about the capital increase of an Asian company in the same segment, what should I put MGLU3 in a state of attention to stronger competition.

“It is important to say that such news, in general, has an effect on the roles of the entire sector”, states the Magazine Luiza, in the statement.

The company also informs that it continues to show growth with projections above the market and highlights positive data from other consultants, such as Compre & Confie, on the company’s participation in e-commerce.

And what does the market say

Who also recommends the purchase of MGLU3 it’s the Itaú BBA. In a report, the bank resumed coverage of Magazine Luiza papers with a purchase recommendation and a target price of R$24.

According to TradeMap data, most analysts estimate that stocks MGLU3 are undervalued at R$17.18 (closed last Friday). Most projections see the target price at around R$30, with 9 buy recommendations, 5 paper maintenance and none for sale.