Latin American shares managed to dodge the battering their North American friends acquired in 2022. And funding financial institution UBS thinks the bull run will proceed this 12 months. This sentiment can be mirrored within the iShares Latin America 40 ETF , which is up practically 4% this 12 months after delivering a ten% achieve final 12 months. The U.S. benchmark S & P 500 is up by the same quantity this 12 months — however slid by greater than 19% in 2022. UBS shared with purchasers its prime shares listed in Latin America, the place it expects “near-term catalysts” to maneuver share costs. “We have targeted on shares the place we consider our analysts have a very differentiated view vs. consensus and the place we see near-term catalysts taking part in a serious function,” the analysts wrote to purchasers. The next are three buy-rated shares with greater than 50% upside from UBS’s “high-conviction concepts with catalysts” report, dated Feb. 8. Cielo UBS analyst Kaio Prato expects shares in Cielo to rise by 88% to 4.79 Brazilian Actual ($0.9) a share over the following 12 months, considerably greater than the 6.3% consensus common worth goal compiled by FactSet. Cielo, Brazil’s largest credit score and debit card operator, is predicted to learn from the Brazilian Central Financial institution’s choice to cap interchange charges from Apr. 1. These charges are normally paid by cost processing companies, like Cielo, to banks that concern the playing cards to clients. Sabesp The funding financial institution expects shares in Sao Paulo state-based water provide and therapy firm Sabesp to rise by 59% over the following 12 months, which aligns with consensus estimates. UBS stated the corporate, one of many world’s largest sanitation corporations serving 28 million individuals in Brazil, will profit from the effectivity and privatization drive anticipated from the newly elected São Paulo state chamber. Based on UBS, the vast majority of elected members within the state legislature are from right-wing events which have traditionally been extra in favor of privatization. Vibra Shares of Vibra Energia , the biggest fuel station operator in Brazil, are anticipated to rally by 50%, in line with UBS. Their worth goal is twice as excessive as the common worth targets of analysts polled by FactSet. The corporate spun off from oil main Petrobras in 2021 and is about to learn from its $590 million acquisition of an power buying and selling agency Comerc. Whereas that deal was initiated in 2021, UBS believes “the market will not be pricing in” earnings upside from Comerc. “We anticipate earnings via 2023 to be optimistic catalysts as upside from Comerc will increase its share inside Vibra’s consolidated [earnings],” stated analyst Luiz Carvalho. “Notably [second half this year] could show to be an necessary sign of the potential upcoming dividends as soon as leverage drops additional.”
