UBS Upgrades Afya Ltd. (AFYA) to Buy on Underappreciated Resiliency

April 15, 2021 6:05 AM EDT
Get Alerts AFYA Hot Sheet
Price: $25.77 +2.06%

Rating Summary:
    6 Buy, 1 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 11 | Down: 12 | New: 41
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UBS analyst Maria Tereza Azevedo upgraded Afya Ltd. (NASDAQ: AFYA) from Neutral to Buy with a price target of $27.00.

The analyst comments "

AFYA underperformed by 27% in the last 6-m, following Bz education names up to -45% performances. Unhedged FX exposure might have also played a part but sector fundamentals have deteriorated considerably in 2020 due to weakened demand and shift to online classes. Medical undergrad, however, remained impervious to such pressures - result of physicians' demand. ~80% of AFYA's revenue come from MedEd. In-line results and guidance, as well the maintenance of 100% seats' occupancy - while diversified players saw up to 500bps margins compression - underscore the segment resiliency. After tweaking our ests to incorporate results, M&As and new Ke parameters, we arrive at a new US$27 PT. Despite few ST organic catalysts, we view recent sell-off as an appealing entry point considering above-average resiliency and cash generation. 1.8:1 upside:downside also support our view and justify our upgrade to Buy."

For an analyst ratings summary and ratings history on Afya Ltd. click here. For more ratings news on Afya Ltd. click here.

Shares of Afya Ltd. closed at $21.53 yesterday.

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