Estacio Remains Target, Kroton to Refocus M&A Plan: Bradesco BBI
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
Tickers
ESTC3 BZ (Estacio Participacoes SA)
KROT3 BZ (Kroton Educacional SA)
People
Luciano Campos (Bradesco BBI SA)
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UUID: 7947283
(Bloomberg) -- Estacio remains a natural target for other education players and private equity investors interested in the sector, especially because the stock is below its fundamental value, Bradesco BBI says in report signed by Luciano Campos and Marcus Sena.
- Estacio’s stock could provide the best returns for investors, either because of returning back to fundamentals, or because the company can start receiving new bids
- In the case of Kroton, bank prefers to stay on the side lines until there’s more visibility about the trends regarding cash flow/Ebitda deterioration and recovery
- Brazilian post-secondary education market is still fragmented
- Significant reduction of students financing program Fies since 2015 and, more recently, the more flexible regulation of distance learning should continue to foster consolidation
- Estacio shareholders should remain open to bids
- Kroton needs to refocus its M&A plans
- Given the challenges post-Fies changes and upcoming competition in the distance learning segment, bank believes Kroton will use its strong balance sheet to consolidate other segments, such as the K-12 segment
- Bank mantains neutral rating for Kroton and outperform rating for Estacio
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
Tickers
ESTC3 BZ (Estacio Participacoes SA)
KROT3 BZ (Kroton Educacional SA)
People
Luciano Campos (Bradesco BBI SA)
To de-activate this alert, click here
To modify this alert, click here
UUID: 7947283