Brazilian Education: 2Q26 Preview: Not Many Surprises Expected; Favor Yduqs on Cash Generation and Capital Allocation

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Brazilian Education: 2Q26 Preview: Not Many Surprises Expected; Favor Yduqs on Cash Generation and Capital Allocation

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

04 August 2026

Brazilian Education

2Q26 Preview: Not Many Surprises Expected; Favor

Yduqs on Cash Generation and Capital Allocation

Brazilian Education 2Q26 results seem generally well-portrayed by the LatAm Technology & Telecom /

Bloomberg consensus, with our estimates showing limited deviations. Yduqs is the Education

only company expected to post accelerating revenues in 2Q vs 1Q, mostly on Marcelo Santos, CFA AC

reduced DIS adoption. Cogna is likely to have strong cash flow generation for the (55-11) 4950-3708

quarter, on late PNLD revenue recognition and collections. We continue to favor marcelo.p.santos@jpmorgan.com

Yduqs in the sector, due to solid free cash flow generation and a well-developed Livea Mizobata

capital allocation policy. (55-11) 4950-3604

livea.mizobata@jpmorgan.com

• Preferences: favor Yduqs on cash generation and capital allocation. While Victoria Antonello

not quite a call on the upcoming earnings print, we favor Yduqs as it sports two (55-11) 4950-3703

important advantages: (1) it has the strongest free cash flow yield of the sector; victoria.antonello@jpmorgan.com

Banco J.P. Morgan S.A.

and (2) it has the most well-developed capital allocation policy among peers,

set out on paper during its 2024 investor day (link to our comment).

• Afya (N): slower growth in all segments, keeping 1Q margin decline levels. Valuation - 2027E

We see revs up 6.3% y/y vs 8.2% in 1Q, as non-medical undergrad revs

P/E FCF Y% decelerate on dropouts (intake was too strong), while continued education and

MPS slow down on competition and World Cup impacts. Margins decline AFYA N 7.6 11.5%