Alpargatas "No Flip-Flop on Sell-Out Momentum, but Watching Cost Outlook" (Buy)

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Alpargatas "No Flip-Flop on Sell-Out Momentum, but Watching Cost Outlook" (Buy)

Global Research

19 May 2026ab

Alpargatas Equities

BrazilNo Flip-Flop on Sell-Out Momentum, but

Watching Cost Outlook Retailers, Apparel

12-month rating Buy

12m price target R$14.50Tweaking estimates post 1Q26 earnings

Prior : R$16.00

We update our estimates following a high-quality 1Q26 print (first read here). On

the positive side, ALPA continues to positively surprise on sell-out trends in Brazil Price (18 May 2026) R$11.30

(+4.1% in 1Q26), supported by strength in the specialized channel and modern food RIC: ALPA4.SA BBG: ALPA4 BZ

retail, reinforcing the case for continued market share gains. Internationally,

growth in European markets (+18% sell-in in 1Q26) also stood out. We infer similar Trading data and key metrics

underlying sell-out dynamics, leaving ALPA well positioned ahead of the European 52-wk range R$16.06-8.35

summer season. On costs, while the outlook remained broadly favorable in 1Q26, Market cap. R$7.30b/US$1.45b

we expect some deterioration following the conflict in Middle East. That said, we Shares o/s 647m (COM)

highlight ALPA’s relatively limited exposure versus what recent market volatility Free float 70%

may imply, with more limited direct total COGS linked to Butadiene and Styrene. At Avg. daily volume ('000) 2,518

the same time, a stronger BRL should provide an offsetting tailwind to margins. Avg. daily value (m) R$30.9

Even so, the broader cost backdrop likely constrains the scope for the continued Common s/h equity (12/26E) R$3.55b

upward earnings revisions seen over recent quarters. All in all, we slightly reduce P/BV (12/26E) 2.1x

our net income estimates by ~4% across the board, now forecasting earnings of R Net debt to EBITDA (12/26E) 0.6x