Weg Setting Dec-27 PT at R$56.00 and Upgrading to OW; High Quality at Attractive Valuation

研报英文原文证据摘录

Weg Setting Dec-27 PT at R$56.00 and Upgrading to OW; High Quality at Attractive Valuation

J P M O R G A N Latin America Equity Research

24 July 2026

Weg ▲Overweight

Previous: Neutral

Setting Dec-27 PT at R$56.00 and Upgrading to OW; WEGE3.SA, WEGE3 BZ

Price (24 Jul 26):R$45.83

High Quality at Attractive Valuation ▲Price Target (Dec-27):R$56.00

Prior (Dec-26):R$46.00

We are updating our estimates for WEG and upgrading the stock to Overweight Latin American Capital Goods

ACfrom Neutral reflecting: i) positive momentum as growth should accelerate in 2H26 Marcelo Motta

and 2027, with top-line up 16% yoy in 2027 vs -3% yoy in 1H26; ii) defensiveness (55-11) 4950-6712

against election volatility, as BRL appreciation should be limited in the short term, in marcelo.g.motta@jpmorgan.com

our view; and iii) attractive valuation at 17.1x EV/EBITDA 27e, a discount of ~15% Jonathan S. Koutras

to peers with similar growth level for 2027 and at a discount to its historical valuation (55-11) 4950-3549

level. We are establishing our Dec-27 at R$56.00 representing an upside of 22% from jonathan.s.koutras@jpmchase.com

Banco J.P. Morgan S.A.

current levels. Moreover, we see WEG as a defensive stock given its exposure to

international markets (60% of top-line); therefore, one of the best vehicles to play the

upcoming macro uncertainty (elections and rates higher for longer). In terms of Style Exposure

estimates, we are keeping revenues unchanged while increasing EBITDA and EPS by

1-3% due to a small improvement in margins. As a result, our numbers now sit 1%

above consensus for 2027e EPS. We now see WEG trading at 17.1x EV/EBITDA 27e

and 25.3x P/E 27e, representing a discount of ~10% over its historical level (15Y

looking at P/Es), and a premium of only 4-10% to peers vs hist.