ASAI - Sendas Distribuidora Q1: Raising The Recommendation From Sell To Hold

2024-06-02 21:07:14 ET

Summary

• Sendas Distribuidora's operating results in 1Q24 were good, with robust annual revenue growth and gains in operational leverage.
• The company's deleveraging process is underway, but its high leverage compared to competitors remains a concern.
• The company's valuation has improved, but there is still no margin of safety, leading to a recommendation to hold rather than buy shares.

Investment Thesis

I recommend holding Sendas Distribuidora ( ASAI ) shares after the 1Q24 results. Since my sell coverage initiation report published on March 12, shares have fallen more than 20%....

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