Safra starts SLC Agrícola with neutral rating and R$ 21 target

On 18 September 2026, Banco Safra initiated coverage of SLC Agrícola with a neutral rating and a 12-month price target of R$ 21 per share, implying an upside potential of 16.99%. Safra analysts noted that while the Brazilian agribusiness group demonstrates high operational quality, its valuation multiples, leverage, and exposure to weather and commodity prices keep the risk-return profile from being attractive enough for a buy recommendation.

According to Safra, SLC trades at 11.5 times estimated 2027 earnings, 24% above its historical average of 9.3 times. The bank projects an average free cash flow yield of 8% across 2027 and 2028, alongside three-year compound annual growth rates of 5% for Ebitda and 12% for earnings per share. Safra also highlighted a net debt to Ebitda ratio of 3.1 times, while the return on invested capital over the trailing 12 months stood at 10%, down from its five-year average of 14% and 1.38 percentage points below the company's weighted average cost of capital.

The bank highlighted that SLC's productivity beats the Brazilian national average by 7% in cotton and 6% in soybeans, supported by a track record of roughly 20% growth in revenue and Ebitda. Additionally, the company's land portfolio is carried on the balance sheet at a value 66% below estimated market value. However, Safra warned that 89% of SLC's planted area lies in Brazilian states historically harmed by severe El Niño weather events, which could offset potential gains from rising commodity prices.