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Investing.com - JPMorgan has upgraded Afya Ltd. (NASDAQ:AFYA) from Neutral to Overweight and raised its price target to $24.50 from $23.50, representing a potential upside of 63% for the Brazilian education company. The $1.37 billion market cap company appears undervalued according to InvestingPro analysis, which aligns with JPMorgan’s bullish stance.
The upgrade follows Afya’s solid second-quarter 2025 results, which JPMorgan noted were roughly in line with expectations and on track to meet company guidance. The company maintains impressive gross margins of ~65% and has achieved 15.6% revenue growth over the last twelve months.
JPMorgan highlighted Afya’s consistent performance record, pointing out that the company has consistently met its guidance since its initial public offering in 2019.
The new price target of $24.50 is based on a December 2026 outlook, compared to the previous December 2025 target of $23.50, offering 63% potential upside in dollar terms or 73% in Brazilian reais.
Despite the stock’s relatively low trading liquidity of approximately $2 million per day, JPMorgan believes Afya presents "an interesting risk/reward combo" for investors who can manage the limited liquidity.
In other recent news, Afya Ltd reported a strong earnings performance for the second quarter of 2025, with earnings per share (EPS) significantly surpassing expectations. The company announced an EPS of $2.27, which exceeded the forecasted $1.98 by 14.65%. However, revenue fell short of expectations, reaching $919.4 million compared to the anticipated $935.49 million. Despite the revenue shortfall, the company’s stock experienced a modest increase. These developments highlight the company’s ability to deliver impressive earnings results, even when revenue projections are not fully met. Investors may find this performance noteworthy as it underscores the firm’s financial resilience.
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