Brazil Fuel Distribution: Continued upward revisions on strong 2Q expectations

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Brazil Fuel Distribution: Continued upward revisions on strong 2Q expectations

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Brazil Fuel Distribution

Continued upward revisions on strong 2Q

expectations

Price Objective Change

Once again, raising estimates and POs 30 June 2026

We update our models ahead of the 2Q results and incorporate revised macro assumptions Equity

(higher Selic forecast). We increase our POs for Vibra and Ultrapar, driven by higher estimates Latin America

not only for 2Q26 but also going forward. We set Vibra’s PO at R$43/sh (from R$42/sh) and Oil & Gas

Ultrapar’s at R$34/sh (from R$33/sh). We remain constructive with the sector, supported by Leonardo Marcondes >>

attractive valuations, and solid momentum. See inside for details of our changes. Research Analyst

Merrill Lynch (Brazil)

Stocks trading slightly below pre-war levels +55leonardo.marcondes@bofa.com11 3140 4801

Vibra and Ultrapar shares are trading in line with the levels prior to the Middle East Caio Ribeiro >>

conflict on February 27. On a relative basis, however, the sector has outperformed both Research Analyst

Ibovespa by 7pp and ICON by 12pp. Despite this relative outperformance, the fact that caio.ribeiro@bofa.com

both names continue to trade broadly inline suggests, in our view, that neither the Nicolas Barros >>

significant margin expansion seen during the period nor the prospective cash flow Research Analyst

generation has been fully reflected in current valuations. We believe technical factors nicolas.barros@bofa.com

have contributed to the recent share price weakness, as a number of investors had

positioned in these stocks as a hedge against geopolitical risk and subsequently

unwound those positions as tensions eased. However, as we discuss in this report, we