Builders and developers Cyrela (CYRE3), Cury (CURY3), Tenda (TEND3) and JHSF (JHSF3) reported operating data for the fourth quarter of 2022 (4Q22) late on Wednesday (17).
Overall, according to analysts, these real estate companies did well as they set out to do in the quarter and throughout the year.
Tenda, for example, opted to reduce the number of launches and improve the company’s profitability, which was seen as positive.
Cury, in turn, has anticipated launches for the first nine months of 2022 (9M22), in an attempt to soften the impact of the election and the World Cup on sales.
Cyrela, on the other hand, managed to post another solid operating performance, reinforcing the company’s successful strategy of positioning products and know-how in the midst of a worsening environment.
Tenda assets were the highlight of the gains, finishing up 17.01% to R$5.16, while Cyrela was up 2.56% to R$14.40, a far cry from the highs of the month. day. Cury, in turn, closed down 2.28% to R$12 after opening higher. Finally, JHSF closed with a slight gain of 0.38%, to R$4.78.
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“Despite the market’s cautious tone in relation to the high and mid-income segment, Cyrela managed to post another solid operating performance in 4Q22, with minor launches in the quarter, but maintaining a reasonable pace, while the sales performance was very robust (58% VSO), preventing any inventory increases and giving a further indication of the company’s differentiated execution,” comments BBI, in a note.
Per BBA, the construction company posted reasonable operating numbers in the quarter and points out that velocity of sale remained solid at 17% (up from 19% in 3Q99), allowing the company to keep inventory levels under control in 15 months ( stable vs .3Q22).
Regarding Credit Suisse, Cyrela reported positive numbers in 4Q22, reinforcing the company’s product positioning strategy and successful know-how in a worsening environment.
“Cyrela has outperformed its peers for some time, managing to maintain a strong sales performance even in a much more challenging environment,” assess the Swiss bank’s analysts.
Credit Suisse says while operational numbers have been positive so far, there are doubts that Cyrela will be able to continue launching projects in 2023 as successfully as those it launched last year, as conditions are likely to worsen. . .
XP Investimentos also judges the data reported by Cyrela as positive, showing a net sales performance higher than expected, exceeding the institute’s estimates by 8.0%, despite the difficult macro scenario.
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In view of this, XP maintains a positive outlook for Cyrela and reiterates a purchase recommendation, with a target price of R$ 33.00. Credit Suisse and BBI maintain an outperform rating for the construction company’s shares, with price targets of BRL 21 and BRL 22, respectively.
In general, consulted banks found Cury’s operational preview solid, with launches slowing as expected, in line with the company’s strategy to bring launches forward to 9M22, in an attempt to cushion the impact of the elections and World Cup sales.
BBA analysts estimate that contracted sales have remained at decent levels, despite the decline in launches, increasing the selling velocity by 70 basis points from the previous quarter. The company also recorded another quarter of strong cash generation of R$136 million.
Bradesco BBI also highlights the company’s solid sales velocity and record cash generation in 4Q22. “The slowdown in Q4 launches reflects the anticipation of launches for 3Q22 and was widely expected.”
According to XP, Cury’s numbers were driven primarily by net sales (Cury’s share) above expectations, despite Cury’s strategy to accelerate launches during 9M22 to avoid demand uncertainties caused by the election and from the World Cup in 4Q22.
XP Investimentos stressed that it expects a positive reaction from the market and reiterates Cury as its top pick in the sector, with a buy recommendation and a target price of BRL 17.00. BBI also has a buy recommendation for Cury shares and a target price of BRL 20.
“Tenda (TEND3) recorded positive operating data in 4Q22, in line with the company’s strategy to focus on profitability by reducing launches,” assesses XP Investimentos.
On the positive side, analysts highlight the average price per unit sold reaching 189.8 thousand reais (+20.5% year-on-year), which should help Tenda improve profitability in the future. Additionally, sales exceeded XP estimates by 22%, causing velocity of sale (VSO) to significantly accelerate to 25.9% (+5.6 pp QoQ).
BBI analysts also rate Tenda’s operating numbers as positive and highlight the manufacturer’s focus on margin reformulation and prioritization of cash generation. “The reduction in launches was part of the company’s agreement with debtors, so not necessarily a negative one, especially considering the constant increase in prices,” the analysts explain.
According to BBI, the margin recovery process is likely to take more than a few quarters to reflect in earnings per share and liquidity constraints will persist.
Goldman Sachs follows the same lines as BBI and XP and comments that it was a good quarter for Tenda as operating numbers were 25-30% above their expectations.
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Furthermore, Goldman Sachs analysts point out that the company continues to raise the average prices of its shares, in order to restore its profitability.
XP reiterates a neutral recommendation for Tenda, with a target price of BRL 11.00, due to the execution risks it sees in the company’s viability recovery process. BBI maintains a neutral rating and a target price of BRL 8, while Goldman Sachs maintains a rating underweight (equivalent to the sale) and target price of BRL 5.
According to XP, JHSF’s solid performance was mainly due to the acceleration of contracted sales in the real estate development segment. Furthermore, analysts point out that the shopping center segment continued with a positive trend, despite the elections and the World Cup.
BBI also positively evaluates the operating results and highlights the growth in sales in the fourth quarter, mainly driven by the success of the “Reserva Cidade Jardim” project (apartments in the city of SP).
Itaú BBA believes the quarterly and annual improvement in the residential construction division was supported by the solid performance of the Reserva Cidade Jardim project. In the Shopping Centers division, total tenant sales grew 8% year over year, indicating a somewhat anticipated slowdown from the 13% recorded in 3Q22.
XP says it continues with a constructive vision for JHSF, with a buy recommendation and a target price of R$9.70. BBI stands by the recommendation far surpass and target price of BRL 10.
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