Fueling a better risk-return perception; Upgrading to Buy

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Fueling a better risk-return perception; Upgrading to Buy

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Ultrapar

Fueling a better risk-return perception;

Upgrading to Buy

Rating Change: BUY | PO: 37.00 BRL | Price: 27.94 BRL

Upgrading Ultrapar to Buy; new PO of R$37/share 08 July 2026

We upgrade Ultrapar to Buy from Neutral and raise our PO to R$37/sh (US$7.4/ADR) Equity

from R$34/sh (US$6.8/ADR) on a more attractive risk-reward profile. With two key

overhangs having materially diminished, we expect 2Q26 results to serve as a major

Key Changescatalyst for the stock, driven by record-high margins and strong FCF generation.

Moreover, we see room for upward consensus revisions in 2H26, as imported diesel (BRL) Previous Current

prices remain well above PBR's, supporting a more favorable margin environment than Inv. Opinion B-2-7 B-1-7

currently reflected in market expectations. With strong operating performance, no major Inv. Rating NEUTRAL BUY

acquisitions on the horizon, and a deleveraged balance sheet, we believe Ultrapar is well Price Obj. 34.00 37.00

positioned to prioritize shareholder returns through higher dividends and/or buybacks — 2026E DPS 0.54 0.53

capital allocation options that are typically viewed more favorably by investors. Finally, a

potential stake sale in Ipiranga to an international company could provide additional Leonardo Marcondes >>

Research Analyst

upside optionality. We raise our dividends estimates as on increased estimates. Merrill Lynch (Brazil)

leonardo.marcondes@bofa.com

We remain positive on Fuel Distribution segment Caio Ribeiro >>

We anticipate very strong 2Q results as a key catalyst for Ultrapar as we believe that ResearchMerrill LynchAnalyst(Brazil)

EBITDA margins over R$400/m³ at Ipiranga seem achievable. While we acknowledge that caio.ribeiro@bofa.com