After ceasing to be a virtually unanimous recommendation on the B3 (Brazilian stock exchange), Weg has once again attracted the attention of investors, with its second-quarter results acting as a catalyst for a return to positive sentiment.
A survey conducted by XP Investimentos identified that sentiment towards the Brazilian manufacturer of industrial equipment and energy and automation solutions, based in the city of Jaraguá do Sul in Santa Catarina, reached its highest level since the third quarter of 2024.
According to the research, this resulted in an improvement in the long positioning of stocks, which increased to 30%, compared to 6% in the first quarter. Meanwhile, the share of short positions decreased compared to the first three months of the year, from 28% to 22%.
The return of positive sentiment is related to the second-quarter results. Approximately 78% of participants considered the numbers better than expected, given the pessimism surrounding the company's ability to sustain profitability after disappointing quarters .
The second-quarter results show that Weg recorded a net profit of R$ 1.56 billion, a decrease of 2.1% compared to the same period of the previous year. On the same basis of comparison, net operating revenue totaled R$ 10.1 billion, a decrease of 0.6%, while EBITDA reached R$ 2.2 billion, a decrease of 2.1%.
"Profitability was the main positive surprise, with 89% of respondents assessing that the reported EBITDA margin was above expectations," says an excerpt from the report signed by analysts Lucas Laghi, Fernanda Urbano, and Guilherme Nippes.
In the second quarter, Weg's EBITDA margin reached 21.8%, 0.3 percentage points lower than that recorded in the same period of 2025. Return on Invested Capital (ROIC) reached 33.6%, an increase of 0.7 percentage points in the same comparison.
For 48% of those surveyed, the numbers represent a trigger for buying the stock, while 35% said that recent macroeconomic developments have made them more constructive regarding Weg.
The research findings are consistent with what was seen in trading on Wednesday, July 22nd, when Weg's shares rose 10.05% to R$ 46.74. In trading on Thursday, July 23rd, the shares were down 2.89% around noon, to R$ 45.39.
The second-quarter results represent a boost for the company, which had been dealing with low expectations from analysts and investors due to factors such as weak domestic demand, currency pressure , and higher raw material costs in recent years.
Many also pointed out that the stock was trading at high multiples, which increased the demand for strong results and left little room for disappointment. Thus, any sign of a slowdown was received with greater caution by investors.
The combination of these factors caused Weg's shares to accumulate a 5.93% drop during the year, bringing the company's market value to R$ 192.3 billion.
Although the improved sentiment is based on results, with XP analysts expressing confidence that growth should accelerate going forward, they warn that they continue to see risks related to the pace of capacity ramp-up and the pricing environment.
For them, Weg should continue to advance gradually, bearing in mind that the company has also become more complex in recent years.
"Looking ahead, we continue to see Section 301 tariffs [US surcharges in retaliation against Brazil] and weak solar demand as headwinds for the second half of the year, partially offset by the ramp-up of new capacity and healthy indications of order intake in EEI [Industrial Electrical and Electronic Equipment]," says an excerpt from the report.
Based on the fact that the stock is trading at a P/E ratio of 27 times for 2027, following Wednesday's strong rally, XP analysts say that WEG's current valuation already captures a good portion of the expected growth trajectory for 2027 and 2028.
