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Investing.com - Scotiabank has assumed coverage of Rumo SA (BVMF:RAIL3) with a Sector Perform rating and a price target of R$22.00, maintaining the previous rating.
The bank notes that Rumo’s future upside potential depends on tariff stability and capital expenditure discipline, areas where visibility currently remains limited. The Brazilian rail logistics company has successfully implemented a price-first strategy over the past five years, expanding unitary pricing at a 13% compound annual growth rate.
This pricing strategy has yielded significant results, with Rumo achieving a 12 percentage point increase in EBITDA margin during this period. However, Scotiabank indicates the company is now entering a transitional phase in its business approach.
The transition centers on Rumo’s expansion in its North Corridor Division, specifically the Mato Grosso Railway (FMT) project, which will add 10 million tons of annual capacity beginning in the second half of 2026. This expansion is prompting management to shift priorities toward volume growth rather than pricing power.
While Scotiabank’s current models align with market and company expectations, the bank cautions that there is "a higher likelihood of negative pricing surprises than positive ones" as Rumo positions itself as a price taker in an increasingly competitive logistics landscape.
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