Shares of Brazilian education group YDUQS surged 12.83% to close at R$8.88 on Monday after both YDUQS and Afya confirmed preliminary merger discussions, according to Itaú BBA.
The brokerage attributed the stock’s advance to a potential reduction in YDUQS’s valuation gap relative to Afya, which trades at a higher multiple. YDUQS currently trades at 4.8 times estimated 2026 earnings, while Afya’s multiple stands at 8.4 times, Itaú BBA noted in a sector report.
A combined entity would create Brazil’s largest medical education operator by annual slots, with 5,888 positions—roughly 15% of the domestic market. YDUQS contributes 2,120 slots, primarily in the Southeast, while Afya adds 3,768 slots concentrated in the North and Northeast regions.
The report highlighted differing leverage profiles: YDUQS’s net debt (ex-IFRS) to trailing EBITDA stood at 2.0 times in Q2 2026, compared with Afya’s 0.9 times. The brokerage suggested the merger could unlock embedded value in YDUQS’s medical education assets, supporting the share price reaction.
Both companies confirmed via Fatos Relevantes that talks are in preliminary stages, with no binding agreements, commitments, or transaction details disclosed. Itaú BBA’s analysis was published as a Sector Flash, providing no stock recommendations, target prices, or earnings revisions.
