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Investing.com - Goldman Sachs upgraded Qualicorp Consultoria e Corretora de Seguros SA (QUAL3:BZ) from Sell to Neutral on Tuesday, while raising its price target to R$2.50 from R$2.00.
The upgrade comes as Goldman Sachs observes signs of a gradual moderation in the company’s longstanding trend of negative net customer additions, which it expects to become more visible in a potentially controlled churn rate in the third quarter of 2025 when adjusting for seasonality.
Goldman Sachs attributes this trend reversal to strategic shifts implemented by Qualicorp’s management team, including a redesigned sales force compensation model that better aligns incentives toward customer retention and higher lifetime value, as well as increased scrutiny in accepting new contracts to mitigate fraud.
The firm also highlighted Qualicorp’s solid free cash flow generation trends, projecting free cash flow to equity of R$208 million in 2026, representing a yield of 27%.
Goldman Sachs noted this strong cash flow generation stems from decent profitability combined with low capital expenditure and working capital requirements, which it views as one of the stronger aspects of the investment thesis.
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