Latin America Retail & eCommerce: Lowering ratings on ALPA, AZZA, LREN and NATU on cross-border tax cuts

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Latin America Retail & eCommerce: Lowering ratings on ALPA, AZZA, LREN and NATU on cross-border tax cuts

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Latin America Retail & eCommerce

Lowering ratings on ALPA, AZZA, LREN

and NATU on cross-border tax cuts

Rating Change

Executive order effectively cuts tax from 44.6% to 20.5% 13 May 2026

Brazil’s presidential administration announced a decree striking down federal taxes on Equity

cross-border eCommerce purchases of $50 and below. Values include freight and effectively Latin America

cut prices on low value imports by nearly 17% (Exhibit 3). Prior duties failed to create tax Retail & eCommerce

symmetry and cross-border eCommerce growth accelerated since lapping implementation of Robert E. Ford Aguilar, CFA

the tax in 2025 (Exhibit 4). The decree makes no compensatory adjustments for landed Research Analyst

inventory for retailers nor attempts at isonomy for the tax burden paid by local BofAS+1 646 855 5439

manufacturers, placing their value propositions at greater risk. The decree is effective robert.e.ford@bofa.com

immediately, and given upcoming elections, appears unlikely to face political opposition. Melissa Byun, CFA

Research Analyst

BofAS

+1 646 855 3177We are lowering our rating on AZZA to Underperform

melissa.byun@bofa.com

We lower our rating on Azzas (AZZA) from Neutral to Underperform and our PO from

Gustavo Fratini >>

R$28 to R$17 as we lower both our estimates and target multiple. Our price objective is Research Analyst

now based on 6x our 2027E EPS (vs. 7x previously), representing a discount to local Merrill Lynch (Brazil)

+55 11 2188 4541

peers and reflecting ongoing competitive and execution risks as well as governance gustavo.fratini@bofa.com

concerns. We are lowering our adj.