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On Tuesday, Jefferies began coverage on C&A Modas Ltda (CEAB3:BZ), issuing a Buy rating with a price target of R$15.00. C&A Modas, known for its apparel department stores, has been a significant player in Brazil’s retail landscape since 1976. The company boasts over 300 stores across 125 cities, positioning it as one of the largest chains of its kind in Brazil.
The firm’s analysts highlighted C&A Modas’ successful market share gains and its reputation for offering value for money. These achievements are attributed to the company’s use of advanced data analytics, which has helped it stay ahead despite the increasingly competitive environment in Brazil’s retail sector. Analysts at Jefferies have expressed a preference for C&A Modas over its competitor, Lojas Renner, due to C&A’s higher growth potential, better market and pricing positioning, as well as a lower dependence on consumer finance and investment.
C&A Modas is currently trading at 6.2 times its estimated 2025 earnings per share (PER) and 2.8 times its enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). These valuations come in spite of the company’s prospects for premium growth, anticipated margin expansion, and a robust balance sheet. The favorable assessment from Jefferies reflects confidence in C&A Modas’ strategic position within the Brazilian market and its potential for continued financial performance.
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