Ultrapar Participacoes S.A. (New) American Depositary Shares (Each representing one Common Share) (UGP) Company Bio
Ultrapar Holdings engages in the fuel distribution and specialty chemical businesses. It operates in four segments: Gas Distribution, Fuel Distribution, Chemicals, and Storage. The company was founded in 1937 and is based in Sao Paulo, Brazil.
UGP Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for UGP, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Ultrapar Holdings Inc ranked in the 67th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 105% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for UGP, they are:
Its compound free cash flow growth rate, as measured over the past 4.02 years, is -0.07% -- higher than only 16.83% of stocks in our DCF forecasting set.
As a business, Ultrapar Holdings Inc experienced a tax rate of about 18% over the past twelve months; relative to its sector (Energy), this tax rate is higher than 79.05% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Energy that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as UGP, try KMI, CLNE, BP, CAPL, and GMLP.
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Brazil's Petroleo Brasileiro SA is set to receive binding offers on Dec. 10 for its Rio Grande do Sul state refinery Refap, with Indian conglomerate Essar Group and local firms Raizen and Ultrapar Participacoes SA among its potential bidders, people familiar with the negotiations said. All three companies have been pre-qualified for the binding phase for Refap refinery, also known as Alberto Pasqualini, the sources added, declining to be named as the details are confidential. Petrobras, as Brazil's state-controlled producer is known, will also receive offers on the same day for its Parana state refinery - Presidente Getulio Vargas, or Repar - as part of a rebidding sale process.
There is also a simultaneous webcast that may be accessed through Ultrapar's website at ri.ultra.com.br and the MZiQ platform. This conference call will have Mr. Frederico Curado, Chief Executive Officer; and Mr. Rodrigo Pizzinatto, CFO and Investor Relations, together with other executives of Ultrapar. Before proceeding, let me mention that forward-looking statements that may be made during this conference on the Company's business perspectives, projections and financial and operational goals are beliefs and assumptions of Ultrapar's management and are based on information currently available to the Company.
Moody's Investors Service ("Moody's") assigned a Ba1 rating to the $350 million proposed senior unsecured notes to be issued by Ultrapar International S.A. under the same terms and conditions as the $500 million notes due 2029, fully and unconditionally guaranteed by Ultrapar Participações S.A. ("Ultrapar", Ba1/Aaa.br) and Ipiranga Produtos de Petróleo S.A. ("Ipiranga", Ba1/Aaa.br). Proceeds from the proposed notes are part of Ultrapar's liability management strategy and general corporate purposes. The rating of the proposed notes assumes that the final transaction documents will not be materially different from draft legal documentation reviewed by Moody's to date and assume that these agreements are legally valid, binding and enforceable.