Brazilian rail operator Rumo’s shares advanced 0.41% on Tuesday after Itaú BBA raised its price target to R$20.50 from R$19.00, citing improved cash generation and cost discipline that are expected to support higher earnings by 2027.
The investment bank maintained its Outperform rating with a wait stance, noting that Rumo’s adjusted EBITDA for 2026 remains unchanged at R$8.16 billion, though the outlook balances a weaker second quarter against stronger performance in the final semester and a 3% tariff increase expected in the fourth quarter. The 2027 EBITDA estimate was increased by 2% to R$9.03 billion, based on a volume projection of 97 billion TKUs, aligning with consensus estimates between R$9.0 billion and R$9.3 billion.
Profit projections for 2026 were raised by 19% to R$1.93 billion, while 2027 earnings were increased by 13% to R$2.59 billion. Capital expenditure for 2027 and 2028 was reduced to approximately R$4.7 billion annually. At the close of trading, Rumo’s shares were valued at R$14.59, representing a 41.1% upside to the new target price.
Analysts Daniel Gasparete, Gabriel Rezende and Pedro Tineo highlighted improved cash generation and cost discipline as key drivers, though they cautioned that El Niño-related risks to productivity and planted area, as well as electoral volatility, could introduce near-term uncertainty. They noted that while the direction is encouraging, greater visibility is needed before adopting a more constructive stance.
The report, published on August 25, also flagged upcoming catalysts, including ownership structure changes and grain price trends, which have shown a more constructive trajectory in recent weeks.
