Ultrapar Model Update

Research evidence excerpt

Ultrapar Model Update

Milene Clifford Carvalho AC Latin America Equity Research

(55-11) 4950-3475 14 July 2026 J P M O R G A N

milene.carvalho@jpmorgan.com

Investment Thesis, Valuation and Risks

Ultrapar S.A. (Overweight; Price Target: R$35.00)

Investment Thesis

Ultrapar has been differentiating from peers as a diversified holding company, with an

active and integrated capital allocation strategy. In the fuel distribution segment, the

company successfully implemented its turnaround initiative (now bearing fruit), and it has

been more active in sourcing alternatives. In Ultragaz, the company has been strengthening

its presence in the bulk market with associated solutions and better margins, while in

logistics both Ultracargo capacity expansion and Hidrovias investment mark the company’s

constructive view on agribusiness exposure. As one of the largest players in fuel

distribution, Ultra is also well positioned to benefit from the increased actions against

irregularities and fundamental reforms. With profitability across the fuel distribution

industry remaining above historical levels, we believe these operational improvements

should increasingly translate into excess cash generation, strengthening financial flexibility

and creating additional scope for shareholder returns.

Valuation

Our December 2026 price target of R$35.0 is derived using DCF (50%) and a SOTP

valuation (50%). We adopt a WACC of 12.4% in Brazilian reais and a fair multiple of 6.9x

EV/EBITDA. We do not have a price target on the ADRs.

Risks to Rating and Price Target

Fuel demand could be lower than expected. If demand for diesel, gasoline, and ethanol

comes in below our estimates and sales do not increase as we expect, our estimates could

be at risk.

Weakening pump prices.