Hidrovias do Brasil (HBSA3.SA): 2Q‘26 Preview: Another Soft Result, Worth Watching for El Niño Risks Ahead

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Hidrovias do Brasil (HBSA3.SA): 2Q‘26 Preview: Another Soft Result, Worth Watching for El Niño Risks Ahead

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23 Jul 2026 20:41:07 ET │ 15 pages

Hidrovias do Brasil (HBSA3.SA)

2Q'26 Preview: Another Soft Result, Worth Watching for El Niño Risks

Ahead

CITI'S TAKE Neutral / High Risk

Short-Term View: Downside

We maintain our Neutral/HR rating on Hidrovias with a TP to R$3.20/sh,

Price (23 Jul 26 18:00) R$3.34 after forecast changes shown in Figure 1 (earnings release on August 10th).

Target price R$3.20 We expect modest operational results, as cargo reception hurdles should

continue impacting North volumes despite good navigation conditions. Expected share price return -4.2%

The outlook for North tariffs also seems softer, pressured by pricing in Expected dividend yield 4.5%

competitive routes and persistent softness expected for this year's corn Expected total return 0.3%

exports lineup. South operations should demonstrate good volumes on Market Cap R$4,544M

hydrology, but tariffs may come weaker due to a weaker US dollar. US$894M

Incorporating Citi's higher SELIC rate forecast drives additional earnings

and FCF burden, while lower capex in 2Q may be compensated for by

heavy maintenance works concentrated in low-season 4Q. Current

valuation of 5.6x EV/EBITDA '27E looks fair to us, given limited growth Filipe NielsenAC

visibility, and it's worth watching for El Niño risks in 2H (more in the note). +55-11-4009-5213

filipe.nielsen@citi.com

El Niño bringing back 2023 sentiment — With the NOAA's forecast indicating an

81% probability of a very strong El Niño in 2H26, it's important to stay cautious

about the downside potential for North hydrology, especially considering that its

peak should coincide with the North's dry season. Hidrovias' direct exposure to