Agora keeps "buy" stance on Sao Martinho

Oct 27, 2011 - Agora has maintained its "buy" recommendation on the stock of Brazilian sugar and ethanol maker Sao Martinho (SAO:SMTO3) in view of the positive scenario for the sector.
The brokerage house has set a share price target of BRL 33.30 on the company.
According to Agora, Sao Martinho is the most efficient among the listed sector players. It has the highest levels of profitability, with earnings before interest, tax, depreciation and amortisation (EBITDA) margin above 40% in the last seven quarters. Moreover, Sao Martinho is the only company whose activities are concentrated just in the sugar and ethanol segment.
The company's financial situation and net debt are comfortable in comparison with its cash generation capacity, the brokerage's experts also noted.
However, Agora recognises the negative effect of the low liquidity of Sao Martinho's shares, which have registered a negotiated average of BRL 1.2 million (USD 682,361/EUR 487,168) per day in the last six months.
Sao Martinho's shares had gained 2.18% to BRL 21.00 at 1112 local time on the Sao Paulo Bovespa Stock Exchange.
(BRL 1.0 = USD 0.569/ EUR 0.406)

Choose your newsletter by Renewables Now. Join for free!