By Brazil Stock Guide — Shares of Azzas 2154 (AZZA3) rose 10.5% to R$19.40 around 3:30 p.m. in São Paulo on Monday, as investors continued to assess the company’s decision, announced on Friday, to hire Morgan Stanley to review strategic alternatives for assets related to Farm Rio.
The review puts Azzas’ most international brand at the center of a broader debate over breakup value, at a time when shareholder tensions have already raised questions about governance, integration and strategy at the fashion group created by the combination of Arezzo&Co and Grupo Soma.
Azzas said the process is aimed at evaluating alternatives to unlock value, while stressing that no transaction has been approved, no structure has been defined, no formal proposal has been received and no binding agreement has been signed.
The statement followed Neofeed reports that Morgan Stanley had been hired to seek a buyer for Farm Rio, in a potential transaction that could value the brand at about US$1 billion, or roughly R$5.1 billion.
That figure would exceed Azzas’ current market value. In a report, BTG Pactual estimated the company’s market capitalization at about R$ 3.6 billion and said the strategic review could become a catalyst for the stock.
Farm Rio is widely seen as Azzas’ crown jewel. Founded in Rio de Janeiro in 1997 by Kátia Barros and Marcello Bastos, the brand became the main growth engine of Grupo Soma before the merger with Arezzo&Co.
According to BTG, Farm generated about R$ 3.3 billion in revenue in 2025, including more than R$ 1 billion from international operations. The brand accounts for roughly one quarter of Azzas’ consolidated revenue, but carries a much larger share of the group’s growth narrative.
BTG estimates that Farm operates with an EBITDA margin above 15%. A US$ 1 billion valuation would imply about 1.5 times 2025 sales and an EV/EBITDA multiple of roughly 7.7 times to 10.3 times, assuming a margin between 15% and 20%.
The gap helps explain the market reaction. While Farm has become a rare Brazilian consumer brand with global relevance, other parts of Azzas’ portfolio — including footwear, basics and more mature apparel operations — have faced weaker demand, inventory adjustments and slower growth.
The review also comes at a sensitive moment for Azzas. A shareholder dispute involving key investors has added pressure to the company’s equity story and reinforced the perception that the group may be worth more in pieces than as a multi-brand fashion conglomerate.
The question is no longer only whether Farm Rio will be sold. The larger issue is whether a valuation exercise around the brand could expose an excessive conglomerate discount in Azzas’ share price.
A sale, partial sale, spin-off or eventual listing of Farm could crystallize value for shareholders. But it would also force the market to reassess what would remain: a Brazilian fashion and footwear group still exposed to integration risks, softer domestic consumption and questions over execution.
BTG kept a Buy rating on Azzas, with a R$ 40 price target. The bank said Farm has stood out inside the portfolio by combining growth, profitability and international expansion.
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