RZTR11 currently presents an attractive entry point at R$85.00, trading at a significant 12.3% discount to its NAV of R$96.93. At this price, investors can achieve a compelling yield on cost of 16.2% (based on the current monthly distribution of R$1.15).
The fund's core portfolio consists of 22 prime agricultural properties totaling 82,661 hectares, with a balanced investment strategy across Sale & Leaseback (51%), Buy to Lease (30%), and Land Equity (16%). The average lease rate of 15.24% on contracts with a 10-year average duration provides strong cash flow visibility.
Key value drivers include:
- Recurring income backed by established agribusiness tenants
- Potential NAV appreciation through Land Equity asset monetization
- Portfolio diversification across multiple Brazilian agricultural regions
- High liquidity with R$5.45M average daily trading volume
The current discount to NAV offers a margin of safety, while maintaining upside potential through both yield compression and asset appreciation as interest rates normalize.
Target Return Profile:
- Current Yield: 16.2% (YoC)
- Capital Appreciation Potential: 14.0% (convergence to NAV)
- Total Return Potential: ~30.2%
Primary risks include interest rate movements, commodity price fluctuations, and broader macroeconomic conditions affecting the agricultural sector.
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Disclaimer
The user felipepuddu has a position in BOVESPA:RZTR11. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.