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RIAA3: Higher Revenue Assumptions And P/E Outlook Will Shape Balanced Return Prospects

Digital Competition Will Further Erode Outdated Retail Footprints

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RIAA3
AnalystLowTarget
Not Invested
Published 28 Jul 2025
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Update shared on 09 Feb 2026

Fair value Increased 43%
Next
22 Apr
R$8.48
AnalystLowTarget's Fair Value
R$12.00
29.3% undervalued intrinsic discount
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1Y
4.2%
7D
1.6%

Narrative Update

Analysts now place a higher fair value on Guararapes Confecções, lifting their target from R$7.00 to R$10.00 as they factor in updated assumptions for revenue growth, profit margins, the discount rate, and future P/E levels.

Valuation Changes

  • Fair Value: The target price has risen from R$7.00 to R$10.00, reflecting a higher implied valuation for Guararapes Confecções.
  • Discount Rate: The analyst model now applies a slightly higher discount rate, moving from 23.28% to 23.85%, which typically makes future cash flows less valuable in present terms.
  • Revenue Growth: Assumed annual revenue growth has increased from 5.72% to 9.26%, indicating higher expectations for top line expansion in the model.
  • Net Profit Margin: The assumed net profit margin has been trimmed from 5.60% to 5.01%, pointing to more conservative expectations on profitability per unit of revenue.
  • Future P/E: The expected future P/E multiple used in the valuation has risen from 9.72x to 14.07x, implying a higher assumed earnings multiple for the shares.

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Disclaimer

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