Brazil Education: Selectivity matters in a tougher macro; Moving Vitru to Buy and CSED to Neutral

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Brazil Education: Selectivity matters in a tougher macro; Moving Vitru to Buy and CSED to Neutral

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Brazil Education

Selectivity matters in a tougher macro;

Moving Vitru to Buy and CSED to Neutral

Rating Change

Higher rates raise the bar for execution 11 June 2026

We upgrade Vitru to Buy and downgrade Cruzeiro do Sul to Neutral post 1Q26 results. Equity

We prefer Vitru and Ser given stronger positioning in a tougher macro environment. We Latin America

upgrade Vitru as its hybrid-learning legacy is a competitive advantage amid regulatory Education and Training

transition, supporting margins and cash generation. On Ser, we favor its exposure to Flavio Yoshida >>

medical programs and resilient margins. By contrast, we downgrade Cruzeiro do Sul to Research Analyst

Neutral, as higher technology investments should pressure near-term results and lead to Merrillflavio.yoshida@bofa.comLynch (Brazil)

a more conservative dividend payout. Despite lower POs, we still see opportunities Mirela Oliveira >>

supported by strong cash generation from better intake cycles. Research Analyst

Merrill Lynch (Brazil)

Vitru: hybrid expertise leading to outperformance mirela.oliveira@bofa.com

We incorporate 1Q26 results, raise our PO to R$21 (from R$18) and upgrade to Buy

after increasing 2026 FCFE estimate by 36%. Our previous Neutral rating reflected high

exposure to programs affected by the new regulation, particularly given uncertainties

around demand for higher OC workload required by it. However, Vitru has operationally Exhibit 1: Upgrade Vitru to Buy and

outperformed peers in 1Q26, reinforcing its hybrid-learning expertise is a key advantage downgrade CSED to Neutral

as it results in a smaller strategic gap to close versus peers.