Ibovespa highlights in the 1st quarter

The Ibovespa ended the first quarter with a drop of 4.84% after a month of March with a loss of 1.03%, with a strong outflow of foreign investors with an eye on monetary policy here and in the USA, news about China and also concerns taxes in Brazil.

However, some stocks stood out more – both in terms of declines and rises. In the month and quarter, Embraer (EMBR3) was established as the major positive highlight, while the biggest drop both in March and in the first three months of the year was with Casas Bahia (BHIA3).

Check out the Ibovespa high and low highlights in the first quarter of 2024 below:

Biggest increases of the quarter

Embraer (EMBR3): +48.77%

Embraer (EMBR3) was highlighted in the month and quarter, with a very important period for the company. The jet maker received higher-than-expected orders from American Airlines, released strong fourth-quarter results that overshadowed a possible post-balance sheet realization movement and also received several positive reviews from major banks. The most notorious case was that of Morgan Stanley, which doubled the target price for the company’s ADRs (American Depositary Receipts, or receipts for shares traded on the New York Stock Exchange) ERJ to US$40, with analysts highlighting the company “ as the third player in the commercial aircraft market, gaining ground and possibly breaking the Boeing and Airbus duopoly.”

3R (RRRP3): +25.53%

The news at the beginning of the year was busy for 3R (RRRP3), with the proposal made to the Board of PetroRecôncavo (RECV3) for the merger of the onshore operations (onshore fields) of the two companies, leading to a spike in shares shortly after the announcement. The process should be long, but it has already excited the market about future operations in the sector, in a context of rising oil prices that caused shares to rise. Meanwhile, the more negative news for Petrobras (PETR3;PETR4) after the non-payment of extraordinary dividends at the beginning of March caused investors in oil companies to look for “alternatives” in the market, which included the junior oil company.

Braskem (BRKM5): +20.77%

Braskem’s shares (BRKM5) rose in recovery after a sharp drop at the end of last year with the news about the sinking of soil in neighborhoods of Maceió (AL), in a scenario taken by news of new people interested in buying Novonor’s stake. (former Odebrecht) in petrochemicals. At the same time, in the fourth quarter, the result showed a recovery trend in the company’s operations. In mid-March, Santander raised its BRKM5 recommendation to equivalent to purchase, based on three pillars: better results in 2024, despite the continually weak cycle; reduction of negative news related to the geological event in Alagoas; and expectations of an increase in discussions on mergers and acquisitions.

Cielo (CIEL3): +19.58%

The big highlight in 2024 for Cielo (CIEL3) was in the news about the proposed delisting (OPA) made by BB Elo, a subsidiary of BB (BBAS3), and Quixaba, a subsidiary of Bradesco (BBDC4). BB and Bradesco are the controlling shareholders of the acquirer. However, some steps must be completed until the OPA is carried out, which may take time, since the Securities and Exchange Commission (CVM) suspended the operation due to requests to call a Special Meeting by shareholders holding outstanding shares. in the market. The company received requests from shareholders holding more than 10% of the shares to discuss a possible new assessment of the value of the company’s common shares, which, for Genial Investimentos, could be a positive trigger for the assets.

Suzano (SUZB3): +15.01%

A better than expected start to the year, especially for the pulp and paper segment, leads to a positive first quarter for the sector’s main shares. In a recent report, Bank of America pointed out, after a trip to China, pulp markets are tighter than the bank’s analysts thought, supporting increases in pulp prices (also leading to a price hike by Suzano SUZB3), while Itaú BBA raised its recommendation for Klabin (KLBN11) from market performance (performance equal to the market average, equivalent to neutral) for outperform (performance above the market average, equivalent to purchase), reinforcing preference for SUZB3.

BRF (BRFS3): +18.18%

The continued recovery movement in (BRFS3) numbers led to a very positive quarter for the company’s shares. At the end of February, the owner of Sadia and Perdigão reported its fourth quarter figures showing a net profit of R$823 million, the first after seven consecutive quarters of losses and with a result well above analysts’ forecasts. With lower leverage and new management, XP Investimentos said it remains highly convinced by BRF’s turnaround story and reinforced the stock as Top Pick in the sector.

Check out the biggest increases in Ibovespa in the quarter:

Biggest casualties of the quarter

Casas Bahia Group (BHIA3): -40.42%

In a turnaround process, the Casas Bahia Group (BHIA3) sees its shares leading the Ibovespa losses in March and in the year after an already very negative 2023. Analysts continue to see a challenging scenario and reiterate a recommendation equivalent to sale or neutral for the shares, with caution reinforced after the fourth quarter results released at the end of the month. The 4Q23 numbers were still considered weak. As JPMorgan highlights, the data was affected by still weak demand, but also by the execution of the restructuring plan and simplification of its structure that added volatility to sales and profitability, which added “to an already polluted base from last year” . The company had an accounting loss of R$1 billion in 4Q23, the largest in history, surpassing the record recorded in the last quarter of 2019, when the loss was R$875 million.

Cogna (COGN3): -32.38%

Another stock that inspires analysts’ caution is Cogna (COGN3). The education company’s turnaround process continues to bear fruit, but the action ends up suffering in high sessions in the future interest market (given its still high leverage) and is also affected by discussions of greater regulation of distance learning by the Ministry of Education. Regarding the fourth quarter of 2023 specifically, the owner of Vasta, Saber and Kroton had an adjusted net loss of R$373 million, but the performance of Kroton, a higher education company, in the quarter was presented by some analysts as the factor for the lower morale with the company, amid the slowdown in growth and margin.

CSN Mineração (CMIN3): -31.70%

Despite the solid results presented by CSN Mineração (CMIN3), including in the fourth quarter, the volatility of ore in the first quarter of 2024 and the view that the shares are already at their fair value lead to less momentum for the assets. On the outlook for the commodity, Citi highlights that iron ore prices are under pressure this year due to a confluence of factors, including a slow start to the construction season in China, high iron ore exports from Brazil and high shipments. for China from non-traditional suppliers amid high ore prices at the end of 2023. Regarding the company itself, in a report in the middle of the quarter, Bradesco BBI highlighted that it had a neutral recommendation for CMIN3 as it already sees the company pricing the fundamentals of ore.

MRV (MRVE3): -30.63%

The beginning of 2024 was particularly negative for MRV (MRVE3), amid a series of negative market revisions to the company’s net profit between 2024 and 2025 due to financial results. In mid-March, at its Investor Day, the construction company presented its vision of doubling net profit by 2025 and simplifying operations. For analysts, the guidance numbers for the coming years (guidance) presented by the company were not enough to encourage investors, as they contained data close to what was estimated by the market. Resia’s potential corporate restructuring, likely to be announced soon, however, could provide more flexibility and unlock value for the company.

GPA (PCAR3): -27.09%

The first quarter was turbulent for the shares of GPA (PCAR3), owner of Pão de Açúcar, with investors paying attention to news about the evolution of the restructuring of the food retail chain and also due to the share offering, which took place in mid March at the expense of a strong dilution of its shareholders. On the other hand, some houses saw the operation as positive, with the company being able to turn “a few pages” in the midst of its turnaround process. This is due to: i) the departure of Casino (in crisis) from control of the company, ii) the entry of Ronaldo Iabrudi, former CEO and chairman of GPA, into the company’s capital and iii) the reduction of its leverage.

Check out the biggest drops in Ibovespa in the quarter: