Compass (PASS3.SA): Resilient by Nature, Positioned for Growth; Initiating with Buy

Research evidence excerpt

Compass (PASS3.SA): Resilient by Nature, Positioned for Growth; Initiating with Buy

Essentials |

17 Jun 2026 07:49:50 ET │ 35 pages

Compass (PASS3.SA)

Resilient by Nature, Positioned for Growth; Initiating with Buy

CITI'S TAKE

We initiate coverage of Compass with a Buy rating and a R$38/share target

price which implies >50% share price upside from current levels. We believe

Compass offers one of the most compelling risk-reward profiles in our Buy

coverage universe by combining resilient, regulated cash flows from its Price (16 Jun 26 18:00) R$24.99

distribution arm while offering structural growth opportunities in Brazil’s

Target price R$38.00evolving natural gas market through Edge, its marketing & services platform

focused on gas commercialization. Expected share price return 52.1%

Expected dividend yield 9.6%

Comgás & Commit: resilience and cash generation — Comgás and Commit form Expected total return 61.7%

the backbone of the Compass investment case, providing resilient and predictable

cash flows under regulated concession frameworks. As the largest gas distribution Market Cap R$17,848M

platform in Brazil, these assets benefit from long-duration concessions, a diversified US$3,528M

customer base and relatively limited volume risk, resulting in stable earnings and

strong cash generation. We believe this regulated foundation not only supports an

attractive dividend profile but also provides financial flexibility to fund growth

initiatives elsewhere in the portfolio, making Compass a uniquely balanced Price Performance

combination of defensiveness and long-term optionality.

(RIC: PASS3.SA, BB: PASS3 BZ)

Edge: the platform driving the next leg of growth — While regulated distribution

provides stability, we believe Edge is the key differentiator of the Compass story.