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After announcing the fourth quarter results of 2024, WEG’s shares (WEGE3) experienced a significant decline in the subsequent trading session, dropping by nearly 10% this year. Nevertheless, JPMorgan maintained its optimistic outlook on the stock, recommending a buy but reducing the target price from R$ 67 to R$ 66, indicating a potential upside of 40%.
Analysts are impressed by WEG’s consistent performance, with a projected annual revenue growth of 21% in 2025 and an Ebitda margin above 22% in the upcoming years. The company is expected to maintain a CAGR of 19% in Ebitda between 2024 and 2027.
The bank determined that WEG was traded at 18.5 times Enterprise Value (EV)/Ebitda in 2025, indicating a 35% discount compared to the average of the previous 5 years and roughly 20% less than the average of the past 10 years.
JPMorgan pointed out potential risks to the company’s outlook, including the possibility of a lower-than-anticipated contribution from Regal to revenue growth and Ebitda expansion in the future.
There is a possibility of quicker margin adjustments than anticipated and a potential slowdown in the US economy, which is a significant market for WEG, accounting for approximately 25% of its revenue.
WEG (WEGE3) holds the second-highest negotiated share volume on the Stock Exchange following the balance.
WEG’s shares (WEGE3) had the second highest trading volume in the afternoon session on Wednesday (26), with a turnover of R$1.0 billion, more than double the previous session’s volume of R$461.3 million. Vale’s shares (VALE3) traded R$1.1 billion in the same period.
Around 6:07 PM (Brasilia time), WEG’s shares (WEGE3) dropped by 8.68% to R$ 47.85.
The Catalan electrical equipment manufacturer disclosed its Q4 2024 financial results on Wednesday, reporting a net income of R $ 1.69 billion.
XP recently reported that the company’s performance in the final quarter of 2024 was varied. Profit met expectations, but revenue growth was offset by a decrease in margins, as stated by the broker.
XP analysts highlighted that profits decreased for the second quarter in a row due to a less favorable product mix, increased raw material costs, and expenses related to the Marathon acquisition, which are expected to have a short-term impact.
Bradesco BB mentioned that the revenue of R$10.8 billion was 3% lower than anticipated, and the adjusted Ebitda of R$2.41 billion was 5% below expectations, influenced by the integration of Marathon and solar energy projects.
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