BofA lifts Assaí target to R$ 12 on lower rates outlook

Bank of America raised its price target for Sendas Distribuidora (Assaí) from R$ 10 to R$ 12, implying a 24% upside potential over its previous closing price. The bank reaffirmed its Buy rating, driven by expectations of lower interest rates and rising food inflation. BofA estimates that every 1 percentage point cut in Brazil's benchmark Selic rate translates into a 6.7% boost to earnings per share, projecting a total rate reduction of 2.75 percentage points through the end of next year.

On Wednesday, 16 September, Assaí shares rose 4.97% to R$ 10.13 around 4:25 p.m. in São Paulo, defying a down session for the Ibovespa index. With that jump, the stock is up more than 20% over the past month and roughly 36% year to date in 2026.

Caroline Sanchez, an analyst at Levante Inside Corp, attributed the recovery to easing balance sheet risks. In the second quarter of 2026, Assaí reduced its leverage to 2.37 times net debt to Ebitda, down from 3.17 times a year earlier, while net debt fell by R$ 1.4 billion over 12 months. Sanchez noted that while the market is recognizing concrete improvements, sustained gains will depend on operational execution, debt reduction, same-store sales growth, and store maturation.

BTG Pactual also highlighted Assaí as a leading cash generation story in retail. According to the bank, the company improved its operating cash flow to Ebitda conversion to 74%, up from 65% in the trailing 12 months as of the first quarter of 2026, while free cash flow to firm over Ebitda rose to 61% from 48%.