J.P. Morgan LatAm FTM 12 May 26 Braskem; Becle, S.A.B. de C.V.; Embraer; Localiza; Brazil Beef and More

Research evidence excerpt

J.P. Morgan LatAm FTM 12 May 26 Braskem; Becle, S.A.B. de C.V.; Embraer; Localiza; Brazil Beef and More

Latin America Equity Research

LatAm First to Market 12 May 2026

Top Stories

| Braskem (Milene Clifford Carvalho)

Margin Tailwinds Unleashed - Upgrade to OW

We upgrade Braskem to Overweight, reflecting improved market fundamentals, tighter supply, and strengthened

governance post-restructuring. Braskem is set for a stronger 2026, as global market challenges and logistics constraints in

the Middle East have tightened petrochemical supply and supported margin improvement. We expect normalization across the

petrochemical chain to take several months, given ongoing facility disruptions and longer logistics lead times. Looking ahead to

2027, Braskem’s financial performance should return to mid-cycle levels, although the lasting effects of the conflict and supply

chain adjustments remain key variables. While the reopening of the Strait of Hormuz could temper upside, we are confident

that Braskem’s strengthened governance post-restructuring and improved fundamentals are only partially reflected in the

BRKM 17% YTD increase. Incorporating the latest CMA estimates for 2026-2028, we raise our December 2026 price target

from R$10.50/share to R$15.00/share (BAK to $5.50/ADR), reflecting stronger governance standards and a 118% higher

EBITDA expectation supported by spreads tailwinds. We see BRKM trading at 3.6x 2026 EV/EBITDA (vs 5.2x of 5y average),

and an upside potential of 63%.

Becle, S.A.B. de C.V. (Froylan Mendez) (CUERVO* MM, N, PT Ps16.00)

U.S. Reset Extends - Destocking + Distribution Re-Org Keep Share and Margin Risks High

Cuervo (N-rated) is expected to continue losing market share in 2026 due to a significant destocking cycle and a U.S.