2024-06-13 14:26:30 ET
Summary
- Ultrapar faces challenges with increased competition due to the possible return of state-owned Petrobras in the fuel distribution segment.
- New changes to tax rules could further increase sectoral uncertainties.
- The valuation is not attractive, both compared to peers and compared to its own history.
Investment Thesis
I recommend selling Ultrapar Participações S.A. ( UGP ) shares. The company operates in an extremely regulated sector and should see increased competition with the possible return of state-owned Petróleo Brasileiro S.A. - Petrobras ( PBR ) in the fuel distribution segment....
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Ultrapar: Potential Regulatory Problems And Unattractive Valuation