|Contributor / Partner
Strategy published on : 09/24/2020 | 05:15
long tradeTarget price hit
Entry price : 62.5BRL
Target : 69BRL
Stop-loss : 59BRL
Potential : 10.4%
The underlying tendency is to the upside for shares in WEG S.A. and the timing is opportune to get back into the stock. A comeback of the upward dynamic can be anticipated.
Investors have an opportunity to buy the stock and target the BRL 69.
● The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.
● Its core activity has a significant growth potential and sales are expected to surge, according to Standard & Poor's' forecast. Indeed, those may increase by 50% by 2022.
● The company is in a robust financial situation considering its net cash and margin position.
● Over the last 4 months, analysts have significantly revised upwards the company's estimated sales.
● Over the past year, analysts have regularly revised upwards their sales forecast for the company.
● Over the last seven days, analysts have been revising upwards their EPS estimates for the company.
● Analysts remain confident with respect to the group's activity and, more often than not, have revised upwards their earnings per share estimates.
● The stock is in a well-established, long-term rising trend above the technical support level at 44.25 BRL
● Stock prices approach a strong long-term resistance in weekly data at BRL 69.17.
● The company's "enterprise value to sales" ratio is among the highest in the world.
● With an expected P/E ratio at 68.39 and 57.14 respectively for both the current and next fiscal years, the company operates with high earnings multiples.
● The company is not the most generous with respect to shareholders' compensation.
● The appreciation potential seems limited due to the average target prices set by the analysts covering the stock.