Grupo Mateus (GMAT3) last week released its results for the second quarter of 2022, which analysts and investors viewed as positive. In addition, shortly after publication, the company also announced a significant change in its corporate structure, in which its founder left the position of president to take a position on the board of directors, which led to a surge in shares.
In addition to delivering strong results for the second quarter of 2022, Grupo Mateus announced that Túlio de Queiroz, the former Chief Financial Officer of Guararapes (GUAR3), will take over as the new Chief Financial Officer, as well as change the role of Ilson from CEO (CEO) to president The board, with Jeswino Borges Filho taking over as the new CEO,” was opened in a report by analysts Daniela Egger, Thiago Suedt and Gustavo Sendai, of XP Investimentos.
While the change in the CEO position, for analysts, has less impact, the appointment of Túlio de Queiroz, who has extensive experience in retail and finance, should help the company to improve internally and also to advance its communications with the store.
“We believe the announcement, along with the strong results reported, represents a new cycle, with improved corporate governance, improved working capital and investment dynamics, and a favorable wind for revenue growth due to store maturation and an increase in Auxílio Brasil,” explained the experts at XP.
With this, analysts last week put the GMAT3 stake with Assaí (ASAI3) among their food retail preferences, as they see positive dynamics for the second half of the year.
Itaú BBA is moving in the same direction, also noting that the Mateus group offers a mix of Catalysts [catalisadores] Positive short term with a evaluation Discounted according to the new forecast. This Thursday, the BBA put GMAT3 as their top pick.
“Working capital dynamics have been a challenge for Grupo Mateus in recent quarters, mainly due to the increase in inventory days as the company adapts its diversified strategy into new territories,” highlighted Thiago Macruz, Maria Infantozzi and Gabriela Moraes, BBA analysts who signed on Report. “We are monitoring this issue closely, and the company made some significant improvements in the second quarter. We hope that this topic remains a priority and that improvements will emerge gradually.”
However, the company became the main choice for the bank segment after the second quarter results. Even as the company’s massive expansion threatens cash flow, with increased spending on working capital, the worst for BBA appears to be over.
“There has been an improvement in the company’s cash flow trends and welcome operating leverage has increased profitability above general expectations. We are now more comfortable paying for expansion.”
Last year, the company opened more than 40 stores, reaching 222 units at the end of June 2022.
“The Mateus Group has a clear leadership position in Maranhão and Pará, which creates significant barriers to entry. players nationals of those countries. Looking ahead, we expect the company to continue its continued expansion into other regions of the North and Northeast,” BBA highlights. “We estimate an expansion in the region of 15% between 2021 and 2024, which will lead to an increase in net revenue.”
In the short term, the retailer’s geographical operations still bring, according to specialists, “the best opportunities”, due to the fact that the region benefits most from Auxílio Brasil – which should be strengthened by the annual promotional actions that the group brings in the second half of the year.
As a result, the BBA updated its revenue forecast for 2022 to R$22 billion, 3% more than its previous forecast. For 2023, the turnover is expected to be R$ 28 billion without changes, and for 2024, it is R$ 36 billion, a figure adjusted by 2.4%. Analysts see the stock trading 9 times price-to-earnings in 2023, well below its peers.
XP Investimentos has a buy recommendation for the common stock of Grupo Mateus, with a target price of R$6 (Upside down 2.3% compared to Thursday’s opening). Itaú BBA shares the same vision, with a target price of R$9 (Upside down from 53.5%).
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