Azzas 2154 Governance Overhang Deepens; Execution (and Breakup) Risks Increasing; Remain Neutral

Research evidence excerpt

Azzas 2154 Governance Overhang Deepens; Execution (and Breakup) Risks Increasing; Remain Neutral

J P M O R G A N Latin America Equity Research

19 May 2026

Azzas 2154 Neutral

AZZA3.SA, AZZA3 BZ

Governance Overhang Deepens; Execution (and Price (19 May 26):R$18.78

Breakup) Risks Increasing; Remain Neutral

LatAm Retail & Healthcare

The news: Following last week’s judicial filing by Roberto Jatahy related to Joseph Giordano AC

organizational changes involving Reserva (link to our comments), subsequent (55-11) 4950-3020

press reports suggest the dispute between Azzas’ key shareholder groups has joseph.giordano@jpmorgan.com

continued to escalate. Developments now include: (1) precautionary court Banco J.P. Morgan S.A.

injunctions temporarily preserving the existing structure around Reserva, (2) Nicolas Larrain

initiation of arbitration proceedings between Alexandre Birman and Roberto (55-11) 4950-3472

nicolas.larrain@jpmorgan.com

Jatahy, (3) the engagement of Itaú BBA by the company to evaluate strategic Banco J.P. Morgan S.A.

alternatives — although management framed the mandate as preliminary and Guilherme A. Vilela, CFA

exploratory, with no defined transaction or restructuring process currently (55-11) 4950-3059

approved — and (4) a CVM inquiry regarding the situation and potential disclosure guilherme.a.vilela@jpmorgan.com

obligations. Banco J.P. Morgan S.A.

Giovanni Vescovi

Our take: While operational impacts remain difficult to quantify at this stage, if (55-11) 4950-2901

any, recent events materially reinforce our view that governance and shareholder- giovanni.vescovi@jpmchase.com

alignment risks have become pivotal to the Azzas equity story. And, while Banco J.P. Morgan S.A.

valuation remains undemanding at 5.0x/4.1x ’26E/’27E P/E (10.5x/7.5x ex-ICMS Froylan Mendez