Itaú BBA upgrades Tupy to buy with a R$ 20 price target

Itaú BBA upgraded Brazilian manufacturer Tupy to outperform from market perform on September 29, 2026. The bank raised its year-end 2026 target price on the stock from R$ 13 to R$ 20.

An analyst team led by Gabriel Rezende projects an operational turnaround in the second half of 2026. The team expects recovering demand and efficiency programs to improve revenue and margins, while recent corporate governance improvements should increase business resilience and dampen earnings cyclicality.

For the third quarter of 2026, over the next 30 to 90 days, Itaú BBA projects net revenue of R$ 2.6 billion and an EBITDA margin of 9.4%. For 2027, the bank models 7% revenue growth and an EBITDA margin of 10.4%, which remains 1 percentage point below the historical normalized level. Additional efficiency measures could expand margins further.

Following share price declines this year, Tupy trades at 3.9 times estimated 2027 enterprise value to EBITDA and 7.3 times projected earnings. Itaú BBA recommends monitoring US truck demand data, while noting risks from a slower margin recovery and an appreciating Brazilian real that could pressure competitiveness.