According to analysts, the prospects for the Brazilian construction sector include players and companies aimed at low, medium and high income
Positive tone with healthy demand in the 2nd quarter. This is how the JP Morgan saw the prospects for the Brazilian construction sector, both for players aimed at low income and companies aimed at medium and high income, as indicated in a report released to clients and the market this Wednesday (May 22, 2024) after an event held with the management of several companies.
“Mortgage disbursements remain in force despite continued SBPE (savings account withdrawals) and potential short-term shortages involving the annual FGTS (Service Time Guarantee Fund) budget for the Minha Casa, Minha Vida program”say JP Morgan analysts.
Construction inflation remains controlled in the low-income segment, which should still be driven by the benefits of the FGTS Futuro program.
“As for the middle and high income segment, inventories in the city of São Paulo are at healthy levels and there is no pressure to lower prices to increase sales. As for the proposed tax reform of VAT (Value Added Tax), it could have negative effects for medium and high income units in its current form and positive effects for low income units, but it is too early to draw any conclusions”, says the bank.
The bank sees construction companies trading at an expected price-to-earnings ratio for this year of 9.9 times, with low income at 11.7 times and medium and high income at 7.0 times.
JP Morgan has a recommendation overweight, or above average, equivalent to purchase, for the shares of Cyrela, Cury Construtora e Incorporadora, Tenda and Direcional. For MRV and Eztec, the indication is neutral.
With information from Investing Brazil.
#Construction #companies #continue #positive #trends #Morgan