2023-09-22 19:56:31
Citi today began covering Allied Tecnologia with a purchase recommendation and a target price of R$10, which gives an appreciation potential of 57% in relation to the screen price.
The share rose 0.6% today – on a low trading day – and the company is now worth R$600 million on the stock exchange.
Allied is the largest electronics distributor in Brazil. She sells more than 10 product categories in 131 physical stores and 37 ecommerce stores – in addition to having a strong presence in marketplaces.
Citi said demand for technology products is highly cyclical – and that the market is now at the worst point in the cycle.
According to analysts, the cuts in the Selic rate should help revive demand, benefiting Allied.
The company has also been working on several additional growth opportunities – which can help reduce the cyclicality of your business.
In addition to distribution – the company’s core business – Allied is growing in B2B, in the used cell phone market and in credit operations.
These initiatives should contribute not only to increasing revenue, but also to reducing risks, reducing the company’s correlation with fluctuations in demand for technology products.
In Citi’s accounts, the stock is being traded at 7x estimated profit for 2024 and 3x EV/EBITDA.
Allied is controlled by Advent, with 64.4% of the capital. The company had its IPO in April 2021 at R$18 per share.
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