UGP - Ultrapar: The Peak Is Here
2024-04-01 13:54:04 ET
Summary
- Ultrapar Q4 earnings were strong in all measures, but the stock price has fallen since.
- The improvements in Gross Margin and Deleverage seem to have been priced in and are expected to subdue during FY'24.
- I don't expect market-beating returns from Ultrapar as it has almost achieved my previous price target. I recommend investors to exit their positions.
I've written about Ultrapar Participações S.A. ( UGP ) twice in the last 10 months. First, in July, I highlighted why this company was a Buy amidst the change in gasoline prices made by Petróleo Brasileiro S.A. - Petrobras ( PBR ). As of March 29th, investors who acted on that article captured a total return of 53.5% compared to 18.3% for the S&P 500. Then, I wrote my second piece in December and argued that the best was behind us and smart investors should start to take profits from their positions as it was unlikely that market-beating returns were still on the horizon. The stock still had some room to grow and eventually peaked at $6.33 before retreating to the $5.72 it is now, which amounts to a total return of 10.5% compared to 13.7% for the S&P 500....
Ultrapar: The Peak Is Here