Lojas Renner SA: Risk Reward Update

Research evidence excerpt

Lojas Renner SA: Risk Reward Update

UpdateM

RiskRisk RewardReward– Lojas Renner- LojasSA (LREN3.SA)Renner SA (LREN3.SA)

Brazil Apparel Leadership, With Drivers For An Improving ROIC Path

PRICE TARGET R$20.00 OVERWEIGHT THESIS

Our price target is derived from a BRL-denominated DCF that assumes 16.5% cost of capital, ▪Renner is a best-in-class apparel retailer in

6.0% terminal growth rate, and 15.1% terminal adj. EBIT margins. PT implies ~11x 2027e P/E. Brazil, with private brand products and an

integrated supply chain as differentiators. R$18.64

Within this fragmented market, we believe

Consensus Price Target Distribution R$16.00 R$22.00 Renner has room to increase market share

MS PT

from current +HSD levels.Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates ▪Renner's competitive set has expanded

from physical apparel peers, now also

including marketplace and cross-border

RISK REWARD CHART operators. This has driven cost-of-growth

pressure across digital retail and financial

services business lines, while peak

BRL headwinds could now be behind.

R$25.00R$25.00(+66.56%)R$25.00(+66.56%)(+66.56%) ▪Combining sales, efficiency, and

24 competitive considerations, we see an

improving ROIC path that does not appear

R$20.00R$20.00(+33.24%)R$20.00(+33.24%)(+33.24%) reflected in Renner's discounted trading

18 multiples versus history.

R$15.01R$15.01R$15.01

Consensus Rating Distribution

67% Overweight

R$10.00R$10.00(-33.38%)R$10.00(-33.38%)(-33.38%) 33% Equal-weight

0% Underweight

MS Rating

0 Source: Refinitiv, Morgan Stanley Research

MAY '25 NOV '25 MAY '26 MAY '27

Key: Historical Stock Performance Current Stock Price Price Target

Risk Reward Themes

Source: Refinitiv, Morgan Stanley Research

Self-help: Positive

View descriptions of Risk Rewards Themes here