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Investing.com - Morgan Stanley (NYSE:MS) has upgraded Afya Ltd . (NASDAQ:AFYA) from Equalweight to Overweight while adjusting its price target to $17.50 from $19.00. According to InvestingPro data, the company currently trades at an attractive P/E ratio of 10.6, suggesting potential upside opportunity.
The upgrade comes despite Morgan Stanley acknowledging long-term risks in the medical school sector, which represents Afya’s core business as a medical education provider in Brazil.
The investment bank cited strong short-term earnings potential as a key factor supporting the rating change, suggesting the company’s near-term financial performance remains solid despite broader industry concerns.
Morgan Stanley also pointed to a narrower valuation gap between Afya and its peers following a recent sell-off in the stock, indicating the shares may now be more attractively priced relative to comparable companies.
The firm further noted that Afya’s lack of exposure to distance learning (DL) is a positive factor contributing to what it describes as a "balanced risk-reward" profile for the educational technology company.
In other recent news, Afya Limited has seen several important developments. The Brazilian medical education company announced that shareholders have approved its financial statements for the fiscal year ended December 31, 2024, during its Annual General Meeting. Additionally, four independent directors were reappointed to Afya’s board for a two-year term. UBS has raised its price target for Afya from $17.50 to $19.50, citing stronger-than-expected medical school intake numbers in the first quarter of 2025, suggesting potential growth momentum for the rest of the year. Afya has also changed its independent registered public accounting firm, as noted in a recent SEC Form 6-K filing, although the new firm’s name was not disclosed. Furthermore, Afya filed its unaudited interim condensed consolidated financial statements for the period ending March 31, 2025, with the SEC, providing key insights into its financial performance. These filings are crucial for maintaining transparency and regulatory compliance.
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