By Brazil Stock Guide – São Martinho (SMTO3) shares surged by more than 3% on Wednesday (27), fueled by an upgrade from Citi. The bank raised its rating on the company from neutral to buy, with a target price of R$ 20.50. The stock briefly soared over 4% earlier in the session, leading the Ibovespa (IBOV) with a 3.8% gain by midday.
According to analysts Gabriel Barra and Pedro Gama, São Martinho has overcome previous challenges. “We have considered operational data from 1Q26, new macroeconomic and commodity estimates, as well as our investment thesis,” they said.
Citi notes that the company has managed to move past obstacles such as lower sugar and ethanol prices, driven by expectations of higher global production, as well as lower oil prices and exchange rates. Furthermore, São Martinho’s increased investment budget after acquiring sugarcane and expanding its corn ethanol production capacity is no longer a concern for the bank.
Citi’s target price indicates a potential upside of 22.7% from the stock’s most recent closing price on the 26th. “We expect SMTO3 to meet its operational targets for this crop year, and we project sugar prices to recover during this season,” the analysts added.
Source: Money Times
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