By Brazil Stock Guide – Iguatemi SA (B3: IGTI11) plans to keep net debt at between 1.5 and 2 times Ebitda as the shopping-mall operator moves through a sizable investment cycle and continues to expand and upgrade its existing properties.
Chairman Pedro Jereissati outlined the strategy during a Sept. 3 meeting with BTG Pactual analysts and the company’s investor-relations team. Capital allocation, portfolio quality and the resilience of Iguatemi’s malls in a tougher Brazilian retail environment dominated the discussion, according to a BTG research note.
The company expects significant capital expenditures in 2026 and 2027 because of ongoing expansions, but sees scope to increase shareholder distributions through dividends and share buybacks over the coming years while maintaining leverage discipline.
Portfolio Upgrades
Iguatemi has improved the quality of its mall portfolio in recent years through acquisitions and active asset management, according to Jereissati. The company does not expect a major increase in the overall size of its operations, but sees opportunities to buy additional stakes in premium properties while selling interests in less productive assets at similar capitalization rates.
Management also sees room to generate more productivity from the existing portfolio by improving the tenant mix and adding gross leasable area through expansions. The approach suggests Iguatemi is prioritizing returns from higher-quality properties rather than pursuing growth in scale alone.
The company intends to keep evaluating transactions on both sides of the market. Potential acquisitions would be concentrated mainly on additional stakes in properties already in its portfolio, while disposals would focus on non-core assets.
Tougher Retail Backdrop
Iguatemi said conditions have become more challenging for Brazilian retailers as high interest rates and household indebtedness weigh on the sector. Still, management told BTG that the company’s portfolio continues to outperform the broader industry.
Demand from international brands also remains strong despite weaker sentiment among domestic retailers, supported by the quality of Iguatemi’s properties, according to the report.
Management expects Brazil’s tax reform to be positive for the mall industry, particularly for a large operator such as Iguatemi, although implementing the new framework could create operational challenges.
Earnings Outlook
BTG forecasts Iguatemi revenue of R$1.55 billion in 2026, rising to R$1.63 billion in 2027. Ebitda is projected to increase to R$1.18 billion from R$1.10 billion estimated for 2025 and then reach R$1.24 billion in 2027.
Net income is forecast at R$455 million in 2026 and R$503 million in 2027, compared with an estimated R$470 million for 2025. The bank expects net dividends per share to rise sharply to R$1.78 in 2027 from R$0.70 in 2026.
BTG reiterated its Buy rating on Iguatemi, citing a 12% real internal rate of return. The report listed a 12-month price target of R$25 and a reference share price of R$26.57. Its forecasts implied a 2.7% dividend yield and a total stock return of -3.2% based on that reference price.
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