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Ultrapar Participacoes SA (UGP)
NYSE:UGP
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Ultrapar Participacoes SA
(NYSE:UGP)
73Outperform
Positive Factors
Business Growth
Ultrapar's core fuel distribution business remains well-positioned to show good growth on the back of a healthier competitive landscape.
Earnings
Ipiranga delivered a stronger-than-expected margin.
Financial Health
Ultra's consolidated net debt decreased, indicating improved financial health.
Negative Factors
Debt
Ultrapar's net debt increased to R$8.0bn from R$7.7bn, as a result of the payment of dividends.
Equity Income
Hidrovias’ equity income contribution was way lower than expected.
Market Conditions
The lack of operational momentum in the short term, due to an oversupply and subdued demand environment, prevents a more bullish outlook on the stock.
Ultrapar Participacoes SA (UGP) vs. S&P 500 (SPY)
Market Cap
$3.32B
Dividend Yield3.41%
Average Volume (3M)2.10M
Price to Earnings (P/E)8.0
Beta (1Y)0.54
Revenue Growth-1.88%
EPS Growth-12.12%
CountryUS
Employees9,558
SectorEnergy
Sector Strength74
IndustryOil & Gas Refining & Marketing
Share Statistics
EPS (TTM)0.40
Shares Outstanding1,115,507,200
10 Day Avg. Volume2,358,019
30 Day Avg. Volume2,102,318
Financial Highlights & Ratios
PEG Ratio0.33
Price to Book (P/B)N/A
Price to Sales (P/S)0.16
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.47Price Target Upside17.63% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Ultrapar Participacoes SA Business Overview & Revenue Model
Company DescriptionUltrapar Participacoes SA (UGP) is a diversified Brazilian company engaged in multiple sectors, including fuel distribution, chemicals, and storage. The company's core operations revolve around its subsidiaries, which include Ipiranga, a leading fuel distribution network in Brazil; Oxiteno, a producer of specialty chemicals; and Ultracargo, a provider of liquid bulk storage solutions. Ultrapar's strategic focus on these sectors allows it to serve a wide range of industries, maintaining a robust presence in the Brazilian market.
How the Company Makes MoneyUltrapar Participacoes SA generates revenue primarily through its subsidiaries. Ipiranga, being one of the largest fuel distribution networks in Brazil, contributes significantly to the company's revenue by supplying fuel to retail and commercial customers through its extensive network of service stations. Oxiteno generates income by producing and selling a wide range of specialty chemicals used in various industries such as cosmetics, agriculture, and personal care. Ultracargo provides liquid bulk storage services, generating revenue by offering storage solutions for chemical and petrochemical products. The company also benefits from strategic partnerships and investments in logistics and infrastructure, enhancing its operational efficiency and market reach.
Ultrapar Participacoes SA Financial Statement Overview
Summary
Ultrapar Participacoes SA shows solid financial health with consistent revenue growth and stable profitability. Balance sheet improvements are seen in reduced leverage and strengthened equity, but there is a slight decline in return on equity. Cash flow generation is robust despite a decrease in free cash flow.Income Statement
Ultrapar Participacoes SA has demonstrated consistent revenue growth, with a 6% increase from 2023 to 2024. The gross profit margin in 2024 is approximately 6.45%, while the net profit margin is 1.77%, reflecting a slight decrease from the previous year. The EBIT margin stands at 3.80%, indicating stable operational efficiency. Despite a slight decrease in net income, the company maintains solid profitability metrics.74
Positive
Balance Sheet
The company's debt-to-equity ratio has improved to 1.04 in 2024 from 0.98 in 2023, demonstrating a reduction in leverage. The equity ratio has increased to 38.32%, showing strengthened equity position. However, the return on equity has decreased to 15.58%, reflecting a moderate decline in profitability on shareholders' equity.68
Positive
Cash Flow
Free cash flow decreased from 2023 to 2024, impacting cash flow strength. Operating cash flow to net income ratio is 1.58, indicating efficient cash generation relative to net income. Free cash flow to net income ratio is 0.82, showing a slight decline, but overall cash flow management remains robust.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 133.50B | 126.05B | 143.63B | 109.73B | 81.24B | Gross Profit |
| 8.62B | 9.32B | 7.36B | 4.90B | 5.61B | EBIT |
| 5.07B | 4.57B | 3.76B | 1.79B | 1.81B | EBITDA |
| 5.06B | 6.36B | 4.48B | 2.77B | 3.05B | Net Income Common Stockholders |
| 2.36B | 2.44B | 1.80B | 850.46M | 893.38M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.62B | 6.22B | 6.14B | 4.08B | 7.69B | Total Assets |
| 39.56B | 38.25B | 36.44B | 39.01B | 36.25B | Total Debt |
| 15.79B | 13.30B | 13.28B | 17.73B | 19.21B | Net Debt |
| 13.72B | 7.37B | 7.66B | 15.45B | 16.55B | Total Liabilities |
| 23.73B | 24.22B | 24.27B | 28.54B | 26.34B | Stockholders Equity |
| 15.16B | 13.51B | 11.71B | 10.07B | 9.53B |
| Cash Flow | Free Cash Flow | |||
| 1.95B | 2.54B | 785.74M | 1.31B | 1.99B | Operating Cash Flow |
| 3.74B | 3.85B | 2.00B | 2.59B | 3.14B | Investing Cash Flow |
| -6.39B | -1.02B | 7.90B | 724.14M | -2.14B | Financing Cash Flow |
| -1.23B | -2.49B | -6.91B | -3.36B | -592.33M |
Ultrapar Participacoes SA Technical Analysis
Negative
2.95
Price Trends
2.90
Positive
2.87
Positive
3.38
Negative
Market Momentum
0.08
Positive
58.59
Neutral
21.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UGP, the sentiment is Negative. The current price of 2.95 is below the 20-day moving average (MA) of 3.04, above the 50-day MA of 2.90, and below the 200-day MA of 3.38, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 58.59 is Neutral, neither overbought nor oversold. The STOCH value of 21.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UGP.
Ultrapar Participacoes SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $19.49B | 5.36 | 18.70% | 16.45% | -1.24% | -16.75% | |
78 Outperform | $16.22B | 5.00 | 22.65% | ― | 7.35% | ― | |
76 Outperform | $82.86B | 13.31 | 10.52% | 20.11% | -10.81% | -70.65% | |
73 Outperform | $3.32B | 8.00 | 16.54% | 3.41% | -1.88% | -12.12% | |
67 Neutral | $40.06B | 12.74 | 16.33% | 2.70% | -6.70% | -57.85% | |
63 Neutral | $35.94B | 13.32 | 10.86% | 3.80% | -10.37% | -65.69% | |
58 Neutral | $9.12B | 5.24 | -7.59% | 7.51% | 0.53% | -65.25% |
* Energy Sector Average
Performance Comparison
UGP
Ultrapar Participacoes SA
2.95
-2.56
-46.46%
EC
Ecopetrol SA
9.00
-1.77
-16.43%
MPC
Marathon Petroleum
121.07
-91.39
-43.02%
PBR
Petroleo Brasileiro SA- Petrobras
13.13
0.10
0.77%
VLO
Valero Energy
104.69
-70.99
-40.41%
YPF
YPF Sociedad Anonima
30.00
8.29
38.19%
Ultrapar Participacoes SA Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: 7.27% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed sentiment, with notable achievements in Ultragaz and Ultracargo's performance and strong cash flow and investment in expansion. However, this was balanced by challenges in Ipiranga's performance, decreased recurring EBITDA, increased leverage, and ongoing issues with unlawful practices in the fuel industry.Highlights
Ultragaz and Ultracargo Performance
Ultragaz's recurring EBITDA totaled RMB 441 million in the quarter, a 9% growth year-over-year. Ultracargo's EBITDA totaled RMB 169 million in the quarter, a 9% growth year-over-year, driven by an improved sales mix, higher tariffs from spot sales, and contractual adjustments.
Investment in Expansion
In 2024, RMB 2.230 billion was invested, with RMB 1.304 billion allocated to expansion, representing 59% of the total. Notable expansions include new Ultracargo terminals and infrastructure projects at Ipiranga.
Operational Cash Flow
Ultrapar maintained a strong operational cash flow generation of RMB 3.736 million in 2024, allowing for increased investment levels while maintaining financial leverage at comfortable levels.
Dividend Payments
Board of Directors approved additional dividend payments totaling RMB 769 million for 2024, reflecting a commitment to returning value to shareholders.
Lowlights
Decrease in Recurring EBITDA
Recurring EBITDA totaled RMB 1.284 billion in Q4 2024, a 23% decrease from Q4 2023, due to lower EBITDA at Ipiranga and the negative impact from the share of loss of Hidrovias.
Challenges in Ipiranga
Ipiranga's recurring EBITDA decreased by 27% year-over-year, mainly due to reduced margins impacted by unlawful practices in the industry and higher inventory levels.
Increase in Leverage
Leverage increased from 1.3x to 1.4x in the last quarter due to a lower LTM EBITDA, partially offset by a reduction in net debt.
Fuel Industry Challenges
Brazil's fuel industry faces challenges with unlawful activities causing significant negative impacts, including a 2.9 percentage point decrease in market share for lawful companies in 2024.
Company Guidance
During Ultrapar's fourth-quarter 2024 results conference call, the company provided guidance on various financial metrics and future expectations. The recurring EBITDA for the fourth quarter was RMB 1.284 billion, marking a 23% decrease from the same period in 2023, mainly due to lower EBITDA at Ipiranga and a RMB 104 million share of loss from Hidrovias. Annually, recurring EBITDA totaled RMB 5.375 billion, a 4% decline compared to 2023. Ultrapar's net income remained stable at RMB 2.526 billion for 2024, similar to 2023 figures, bolstered by higher extraordinary tax credits despite a lower recurring EBITDA from Ipiranga. The company declared additional dividends of RMB 493 million, with a total distribution of RMB 769 million for 2024. Operational cash generation slightly decreased by 2% to RMB 3.736 million due to higher working capital investment. Ultrapar's investments reached RMB 2.213 billion, a 14% increase, primarily driven by higher investments in Ultracargo. The company also highlighted challenges from unlawful practices in the fuel industry, impacting margins and competitive dynamics, but expects regulatory advancements to improve the competitive landscape. For 2025, Ultrapar plans to invest RMB 2.542 billion, with a focus on expansion.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.