Update shared on 01 Dec 2025
Fair value Increased 1.24%Analysts have increased their price target for WEG from R$46.88 to R$47.46. They cite improved revenue growth expectations and express confidence that recent concerns about tariffs and renewables are overstated.
Analyst Commentary
Recent commentary from street analysts highlights a mix of optimism about WEG's growth trajectory, balanced by ongoing concerns related to market dynamics and execution risk.
Bullish Takeaways
- Bullish analysts emphasize that worries regarding tariffs and renewable order softness are likely overstated. They suggest that market fears may have created a more attractive valuation entry point.
- Forecasts for EBITDA in 2026 and 2027 are considerably higher than consensus, reflecting confidence in the company’s margin resilience and earnings potential.
- Revenue growth expectations have been revised upward, driven by the company's ability to adapt and capitalize on opportunities within the electric equipment market.
- Despite recent underperformance versus peers, analysts see WEG as poised for a rebound as market conditions normalize, supporting their increased price targets.
Bearish Takeaways
- Some caution remains about the impact of tariffs on WEG’s export competitiveness, highlighting ongoing external pressures.
- Slow order growth in renewables continues to be a watchpoint, as it could affect revenue visibility over the near to medium term.
- Execution risks persist, particularly in fulfilling higher profit expectations set by analysts. This may pose challenges if market uncertainties continue.
Valuation Changes
- Fair Value has increased slightly from R$46.88 to R$47.46, reflecting higher investor confidence.
- Discount Rate decreased marginally from 21.85% to 21.83%, suggesting a small improvement in perceived risk.
- Revenue Growth projections have risen notably from 9.17% to 12.45%, indicating stronger expected business performance.
- Net Profit Margin improved from 16.03% to 16.50%, signaling modest gains in operational efficiency.
- Future P/E ratio declined from 41.22x to 37.08x, which points to lower valuation multiples based on forward earnings.
Disclaimer
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