Localiza , a group specializing in vehicle rental and used car sales, saw its shares soar in early May after releasing its January-March earnings report, surpassing the R$1 billion mark in net profit for the first time in a single quarter – in addition to reporting other indicators above market projections.
The result provided further fuel for the recovery plan the company had been charting this year. But a new fact, revealed this week, emerges as a point of concern along this path. This is what a new report from Itaú BBA shows.
The potential obstacle arose following the announcement made on Tuesday, May 19th, by President Luiz Inácio Lula da Silva, regarding the launch of the Move Aplicativos program, which involves a R$ 30 billion credit line to finance the purchase of cars by ride-hailing drivers and taxi drivers.
With the goal of enabling the sale of 200,000 to 300,000 cars, the initiative initially projects interest rates of 12.6% per year for men and 11.5% for women, with a six-month grace period and up to 72 installments. And, in Itaú BBA's view, this brings a "potentially negative" balance for Localiza.
"Although we do not expect any structural change in the investment thesis (a high-quality, high-beta alternative with an upward bottom-up history), we believe this announcement may bring some volatility to results and consensus," the bank highlighted.
According to Daniel Gasparete, Gabriel Rezende, and Pedro Tineo, analysts at Itaú BBA, there are two factors at play in this trajectory. The first is the impact that demand in the group's rental area may face, with the eventual migration of this customer profile from renting to buying vehicles.
The second possibility would be a slowdown in used car sales, since, in the bank's view, the program opens the door for these drivers to opt for purchasing brand-new cars, given that the installments can become very similar to the amounts charged for used cars.
"Although it is too early to pinpoint the impact, we believe this announcement may keep the earnings consensus closer to the lower end of investors' projections for 2026 (from R$4.3 billion to R$4.5 billion) and prevent expectations for 2027 from exceeding R$5 billion," the bank says.
With a buy recommendation and a target price of R$ 54 for the stock, the trio of analysts at Itaú BBA, however, makes a reservation. "That said, we maintain our range of R$ 40 to R$ 50 for the share price, which means we would buy in case of a significant drop after this announcement."
After closing yesterday's trading session with a decline of just over 2%, Localiza's shares were up 4.61% in today's trading on the B3, around 11:45 am. Year-to-date, the shares have appreciated by 1.3%, valuing the company at R$ 48.2 billion.
