Jalles Machado

Research evidence excerpt

Jalles Machado

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05 Jul 2026 22:02:16 ET │ 10 pages

Jalles Machado (JALL3.SA)

Key takeaways from 2026 Jalles Day

CITI'S TAKE

Neutral At the 2026 Jalles Day, management highlighted the operational

maturation of the Santa Vitória (USV) unit and a robust roadmap for cost Price (03 Jul 26 18:00) R$2.15

efficiency through "Agriculture 4.0". Key initiatives include deploying Target price R$2.50

autonomous tractors, unified control towers, and internal biological Expected share price return 16.3%

controls to optimize margins. While the potential corn ethanol project Expected dividend yield 0.0%

offers strong operational synergies and biomass advantages, we are Expected total return 16.3%

concerned about the impact of significant CAPEX on leverage, particularly

Market Cap R$653M given the weak pricing outlook for sugar and ethanol. Additionally,

US$126M management noted structural demand headwinds, citing GLP-1 weight-

loss drugs as a risk to long-term sugar consumption growth. Despite these

challenges, we remain encouraged by the company's progress toward its

c.9mn tons crushing goal and the pursuit of lower unit cash costs through Gabriel BarraAC

enhanced productivity and technological integration. +55-11-4009-2223

gabriel.barra@citi.com

The company is modernizing operations to reduce costs, evaluating autonomous Pedro Gama

tractors to optimize uptime, reduce errors, and mitigate labor shortages. Efficiency +55-21-4009-0431

drivers also include a unified Control Tower and the adoption of internal biological pedro.gama@citi.com

controls to combat pests like the sugarcane borer, which is cheaper than chemical

treatments. Regarding strategic investments, the most significant project is a

potential corn ethanol plant. While we view this as operationally positive, the