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Report by Churchill Research

Mike Churchill sets a 12-month TP of R$8.46 (70% upside) for this consumer electronics distributor - based on 9x 2024 earnings (10.5% FCF yield) which seems fair given its growth rate, net income margins of ~10% and solid balance sheet. It appears Multilaser's IPO last year was time to capitalise on the lockdown boom. The share price has followed a similar pattern to former Brazilian glamour stock Magazine Luiza, which was all the rage a year ago (billed as the Brazilian Amazon), but has since fallen by 80%. However, the big difference between the two stocks, is that Magazine Luiza still trades at 100x earnings and 2.7x book vs. Multilaser at 6.8x earnings and 1.1x book.

Edition 135 - 13 May 22