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Investing.com - UBS downgraded Companhia Brasileira de Aluminio (CBAV3:BZ) from Buy to Neutral on Tuesday, while significantly reducing its price target to R$4.00 from R$7.00.
The downgrade follows disappointing first-half 2025 results from the Brazilian aluminum producer, with the company reporting second-quarter figures that missed consensus estimates by approximately 30%.
UBS cited operational issues at the company’s alumina refinery as a key concern, noting that process stabilization is only expected by the fourth quarter of 2025.
The investment bank has lowered its EBITDA estimates for Companhia Brasileira de Aluminio by approximately 50% for 2025, projecting that the company will burn cash this year with leverage reaching 4.2x by year-end.
UBS also expressed caution about short-term fundamentals for aluminum, anticipating a potential demand soft patch in the second half of 2025, while noting that demand fundamentals in Brazil have deteriorated.
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