UBS Upgrades Afya Ltd. (AFYA) to Buy on Underappreciated Resiliency
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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."
Shares of Afya Ltd. closed at $21.53 yesterday.
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