Was the 34% jump in Casas Bahia (BHIA3) a ‘flight of chicken’? Analysts say whether it’s time to invest in the retailer

O Casas Bahia Group (BHIA3) made headlines after surprising the market with a request for extrajudicial recoveryreleased last Sunday (28).

The retailer’s objective is to restructure its debts, with estimated value of R$4.1 billion, and the reaction of the Brazilian stock exchange was quite positive. The share soared 34% at the last close (29) and cost more than R$7, but has already plummeted 6% this Tuesday (30).

With the extrajudicial recovery, the maturity period of the company’s debts will be extended from 22 months to 72 months, which, in the view of the market and the CEO of Casas Bahia – Renato Franklin –, can generate more peace of mind for the retailer.

This is because, since August last year, the company has been carrying out an operational transformation plan to resolve its financial crisis. The focus is to reduce the leveragereduce stores and employee expenses.

Now, with the extrajudicial recovery, the The market expectation is that Casas Bahia will have relief in its accounts to focus on this planwhich explains the significant rise in shares.

With positive outlooks like these, it is natural to believe that there is a buying opportunity in the retailer’s shares. But we need to give you a spoiler: a group of analysts goes against the market and has a contrary opinion on the BHIA3 stock…

READ MORE: Empiricus Research released a free portfolio of 10 best stocks to invest in now – 3 stocks are from the retail segment.

Is the appreciation of BHIA3 a buying opportunity or a ‘flight of the chicken’?

The market’s reaction to the extrajudicial recovery was, without a doubt, positive. But the truth is that, for analysts at Empiricus Research, the rise in Casas Bahia shares is still not a sufficient reason to invest in the stock.

Since the beginning of 2024, the BHIA3 share has fallen by 40%. In the last 5 years, there has already been a meltdown of more than 93% in the value of securities.

The company was one of the retailers most affected by the high Selic rate period and sank into a financial crisis. To give you an idea, only in the 4th quarter of 2023 did the company record a loss of R$1 billion6 times greater than the same period of the previous year.

Therefore, in this scenario, Empiricus Research analysts prefer to give attention to retail companies that are more solid and be more prepared for the current macroeconomic situation.

This is the case of 3 stock exchange retailers that, according to the analysis team, are the favorites to invest in now and are at an excellent entry point.

This is because they are roles:

• Cheap;
• With good foundations;
• And with the potential to deliver up to 100% profit to investors.

To get an idea of ​​the confidence that Empiricus Research has in these 3 retailers, the shares were included among the 10 best stocks on the stock exchange to invest in now and rank 25% of the weight of this portfolio.

Favorite retailers to have in your portfolio: why were these stocks chosen?

The three retailers in the portfolio are part of different retail segments, but they have some points in common, such as high quality of papers, prices below the historical average and possibility of soaring with the Selic falling cycle, for example. See some highlights:

1. “Premium” shopping mall company, with a very high quality portfolio

As a company aimed at audiences A and B, the retailer is more resilient than its peersin the view of Empiricus Research, as the average customer’s consumption tends to fluctuate less in more difficult economic periods (learn about the role here).

2. Fashion retailer for audiences A and B

Just like the “premium” shopping mall company, this retailer also stands out due to its high-income audience:

“In times like the current one, where domestic income is still fragile (mainly affecting companies exposed to classes C and D), this retailer tends to have a more resilient operation than other players in the sector, protecting the profitability of the business”said analyst Larissa Quaresma, from Empiricus Research.

Furthermore, a recent merger could generate a lot of value for the company and make it an “empire” in Brazilian fashion retail.

3. Sporting goods company that can shoot up to more than 100%

This retailer is the largest player in the sports segment in Brazil and, even so, it is being ignored by the market, in the view of Empiricus Research.

Analysts argue that this stock is extremely discounted and could “surf” the interest rate cut – which has already started to happen, as it has jumped 60% in the last 6 months.

But even with such an attractive past return, the prospects are even better for the company’s future. A The estimate is that this paper still appreciates more than 100%. In other words: the action can more than double the money invested.

Casas Bahia is not on the list: see which 3 shares in the sector are worth investing in now

Therefore, analysts argue that there are more promising retail stocks than Casas Bahia’s shares to invest in now. These are more solid companies with better fundamentals for the long term.

However, as previously stated, these 3 stocks were included in a portfolio with the 10 best stocks to invest in in the current scenario. Therefore, You came into this article wanting to know retail stocks that are worth it and can leave with a complete portfolio of assets.

This is because Empiricus Research is releasing this entire portfolio of assets that are the “filet mignon” of the stock market 100% free. In other words: it is possible to learn about stocks with profit potential combined with good fundamentals without spending a single cent.

Just access this link and follow the instructions. In a few clicks you will be able to find out about the best shares on the stock market to buy now (the 3 retail shares better than Casas Bahia are among the recommendations).