Movida (MOVI3) shares fall after acquisition of European leasing firm; good buy but cheap
The shares of Movida (MOVI3) fell nearly 2% round 12:50 pm this Thursday (22), in opposition to the Ibovespa, which rose 0.30%, and Localiza (RENT3), its greatest competitor in Brazil, which elevated by 0.50%.
The fall in shares comes after Movida introduced final night time the acquisition of Portuguese firm Drive on Holidays (DOH), kicking off its worldwide enlargement.
For analysts, the sale is good, as it should enter a brand new market, but it should convey the problem of good points in scale and commerce with the automakers, and likewise in Brazil, which have to be developed.
Movida goes international
“It is good information for Movida, as the corporate is engaged on its first worldwide route, it must convey experience to broaden its operations in different areas of Europe the place there’s a giant circulation of Brazilian vacationers” , opened by a bunch of investigators. of Bradesco BBI , headed by Victor Mizusaki.
BBI additionally factors out that the sale was made at a pretty a number of, 17% under what Movida itself is promoting for, with a market worth of 4.8 occasions its pre-earnings. curiosity, taxes, depreciation and amortization (EBITDA, in English).
Drive on Holidays had a turnover of 66 million euros – or R$ 335.6 million -, and registered an Ebitda of 16.3 million euros within the final 12 months.
“We anticipate that Movida will use its R $3.9 billion of overseas forex to pay for this acquisition. The great amount of revenue from this operation may even assist to cowl its steadiness sheet and, as well as, the sale mustn’t have an effect on the corporate’s revenue”, says the BBI.
Itaú BBA follows the identical line, principally optimistic, saying that Movida is shifting ahead in a prudent and worthwhile manner, and regardless of the low gross sales, it’s engaging many – as the corporate’s margins have grow to be, “one of the best on the planet”.
“Without disrupting the corporate’s marketing strategy in Brazil, the introduced M&A will enable Movida to extend its studying curve within the new Portuguese market with restricted penetration”, mentioned the group and Daniel Gasparete.
“The mixture of Movida’s in depth expertise within the automotive rental business and the know-how of Drive on Holidays’ skilled administration crew will present a major alternative.”
BBA inspectors additionally spotlight the expertise of DOH Executive Director, Ricardo Esteves, with almost 20 years of expertise, and the Portuguese automotive rental market is very segmented, providing the expansion path.
XP sees Movida’s transfer as unreasonable
For XP Investimentos, the acquisition of Drive on Holidays mustn’t change the expectations for Movida, as a result of restricted share.
“DOH has a complete of 3,300 autos (devoted to the Rent-a-Moto phase), representing just one.6% of Movida’s complete autos. Despite the small dimension, we see the worldwide motion as surprising (reflecting Simpar’s technique of altering half of its earnings in exhausting currencies), argue analysts and the service provider.
Credit Suisse factors out that the market ought to watch the transfer suspiciously, one thing BTG Pactual defended.
“Local traders have been taught to use the automotive rental business primarily based on native benefits, together with market energy and mechanics and the power to buy used vehicles. When coming into to a brand new territory, the market should monitor Movida’s potential to develop these benefits on the spot”, defined the financial institution.
Levante, in the long run, raised considerations concerning the firm’s debt, and the strain of financing in one other quarter by means of gross sales – and the worth of DOH, in Brazil, will be paid on the market of 5 thousand vehicles of BRL 60 thousand.
“The market ought to take into consideration, within the coming phases, the power of Movida to generate earnings at a time when the speed of enhance in site visitors is gradual, along with monitoring the worth of credit score and the unfold of the fairness worth relative to the return. primarily based on the capital. funding “, they concluded.
The MOVI3 suggestion and worth
Bradesco BBI has suggestions higher (above the market common) for Movida’s widespread shares, with a worth of R$25 (up 87.8% from right now’s opening worth), together with Itaú, which has R Priced at $26 (95.3% up).
XP and BTG suggest to promote the paper, with mounted costs, at R $ 25 (87.8% up) and R $ 28 (110.3% up).