Urban Growth And Broader Eligibility Will Drive Housing Expansion

Key Takeaways

• Regulatory support and demographic trends are driving increased demand, supporting sustained growth and resilience for Cury in key metropolitan markets.
  
• Operational efficiency, prudent financial management, and strategic expansion efforts position the company for strong margins and continued outperformance.
  
• Heavy reliance on select regions and government programs, rising costs, land competition, and operational complexities heighten risks to margins, revenue growth, and long-term profitability.

Catalysts

Operates in real estate businesses.

• The recent expansion of the Minha Casa Minha Vida (MCMV) program's bracket 4-with a higher price cap and broader eligibility-has already driven 92.8% of Cury's sales to fall within this framework, materially enlarging the potential customer base and ensuring stable demand; this regulatory tailwind is poised to support sustained mid
• to long-term revenue growth.
  
• Elevated urbanization and population growth in Brazil's metropolitan centers (where Cury is increasingly focused, with new land bank additions and project launches in São Paulo and Rio de Janeiro) are likely to underpin steady demand for new housing, providing strong top-line expansion and resilience against potential industry slowdowns.
  
• Cury's continued operational efficiency, including standardized projects, robust cost controls, and disciplined land bank acquisition strategies, have led to industry-leading gross and net margins (39.8% and 19.8% respectively in Q2 2025); these practices are expected to protect and potentially expand margins even as the market normalizes.
  
• The company's prudent financial management-demonstrated by its net cash position, strong cash flow generation for 25 consecutive quarters, and a consistent dividend payout policy-supports high return on equity (70.1%) and earnings stability, increasing the likelihood of continued robust earnings and high dividend distributions.
  
• Acceleration of new launches and expanded portfolio (with a PSV land bank of R$21.1 billion and major new projects in central, transit-connected neighborhoods) position Cury to leverage demographic trends and capture further market share, ensuring that top-line growth and operational leverage will translate into higher future earnings.

Cury Construtora e Incorporadora Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Cury Construtora e Incorporadora's revenue will grow by 22.5% annually over the next 3 years.
• Analysts assume that profit margins will increase from 16.9% today to 17.6% in 3 years time.
• Analysts expect earnings to reach R$1.5 billion (and earnings per share of R$4.56) by about August 2028, up from R$786.6 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 12.1x on those 2028 earnings, which is the same as it is today today. This future PE is greater than the current PE for the BR Consumer Durables industry at 11.0x.
• Analysts expect the number of shares outstanding to grow by 0.68% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 20.54%, as per the Simply Wall St company report.

Cury Construtora e Incorporadora Future Earnings Per Share Growth

Risks

• Cury's significant concentration in São Paulo and Rio de Janeiro exposes it to region-specific economic downturns, regulatory changes, or stagnating demand in these cities, which could result in weaker revenue growth and margin pressure if local market conditions deteriorate.
  
• The company's heavy reliance on the Minha Casa Minha Vida (MCMV) housing program and especially its new higher price bracket (Bracket 4) makes Cury vulnerable to government policy changes, subsidy reductions, or funding constraints-potentially causing volatile revenues and reduced earnings if political priorities shift or economic restrictions intensify.
  
• While construction material inflation is currently stable, management notes persistent upward pressure from labor costs and the potential for future input cost inflation, which could compress gross margins and reduce net income as maintaining or improving margin levels becomes more challenging.
  
• Intensifying competition for land in São Paulo and Rio was highlighted, which could raise acquisition costs and make project economics less attractive, limiting Cury's ability to maintain its profitability and net margins in the long term.
  
• The ongoing need for customer and broker education around using new funding models (like Bracket 4) and operational complexity of larger projects present execution risks that may strain operational efficiency, slow sales conversion or increase delivery risks, impacting cash generation and potentially reducing future earnings growth.

Valuation

• The analysts have a consensus price target of R$35.409 for Cury Construtora e Incorporadora based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of R$42.0, and the most bearish reporting a price target of just R$21.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be R$8.6 billion, earnings will come to R$1.5 billion, and it would be trading on a PE ratio of 12.1x, assuming you use a discount rate of 20.5%.
  
• Given the current share price of R$32.8, the analyst price target of R$35.41 is 7.4% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.