CIOXY - Cielo: Limited Upside Potential On The Verge Of A Public Buyback Offer
2024-02-23 08:06:14 ET
Summary
- Cielo, a payments company in Brazil, has implemented cost-reduction measures and seen a gradual recovery in profitability.
- The company's two controlling shareholders, Bradesco and Banco do Brasil, have proposed a public buyback offer to privatize Cielo.
- A proposed takeover bid to privatize the company at around $1 per share for its ADR suggests limited upside potential.
- Despite being undervalued compared to peers, DCF analysis indicates Cielo's limited upside potential.
Reviewing Cielo's (CIOXY) investment thesis since my last coverage , I have taken a neutral stance on the company. Cielo, a payments company, was in the process of recovering from the challenges of 2022, marked by significant macroeconomic headwinds in Brazil, including an interest rate hike to nearly 14% and a challenging credit environment in the first half of 2023, which impacted the company's revenue and transaction volume....
Cielo: Limited Upside Potential On The Verge Of A Public Buyback Offer