The average target price of JHSF3.SA is 6.9 and suggests 36% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 10.0. This translates into 98% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 4.2. This is equivalent to 17% downside potential in the worst case. 

JHSF Participações S.A., through its subsidiaries, engages in the construction and operation of shopping malls. The company operates through: Recurring Income, Real Estate, Airport, and Hotels and Restaurants segments. It develops real estate; purchase and sale of residential and commercial properties; leasing of commercial properties; operation of hotel, gastronomic, and tourist activities; and operation and management of the aerodrome, as well as provision of administration services. The company was incorporated in 2006 and is headquartered in São Paulo, Brazil.

Brazil

JHSF Participações S.A.

Real Estate

The company pays dividends most of the time. It has paid dividends in almost every one of the past ten years. Dividend per share (DPS) has grown yearly, and there is a clear trend. In the past 12 months, the dividend yield has been outstanding and can be rated excellent compared to its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. On average, the company pays dividends every two months, which may appeal to investors valuing a regular income stream. 

JHSF3.SA reported revenue of BRL 1 608mn in the last 12 months, up 0% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 76% from FY23 to BRL 1.27. Market expects EPS to reach BRL 0.69 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 23ppts and its growth accelerated by 30ppts in the past month. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months it exceeded the performance of this peer group by 11ppts and accelerated its growth by 22ppts in the recent month. Given the stock's valuation versus its peers, its total price movement is mildly favourable.

The company has reported very strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 70.5% in the last 12 months, up from 37.2% in FY23. 

Historically, JHSF3.SA has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 53.1%, a growth from 29.5% in FY23. 

JHSF Participações S.A. reported a return on equity (RoE) of 16.7% in the last 12 months, up from 9.9% in FY23. The market consensus projects an RoE of 13.5% in FY24, again ahead of its peers. 

Another important profitability metric, return on assets (RoA), amounted to 7.0% in the last 12 months, an increase from 4.4% in FY23. The market analysts predict that RoA will be 5.7% in FY24, again stronger than its peers. 

In the last 12 months, the return on capital employed (RoCE) grew to 8.2%, above the peers. The consensus estimate for FY24 for RoCE is 7.2%, however, this time below its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.7 in the past several years. This ratio implies a good shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

JHSF3.SA has above average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually quite stable and remains favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, excessive margin volatility, and poor working capital management.

In highly turbulent market conditions, JHSF3.SA is as volatile as an index. In other words, the stock will move with the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be limited. 

In normal market circumstances, JHSF3.SA is moderately volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move slightly wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to mild. 

Considering past and projected metrics, the stock is 'cheaper' than its peers. In particular, the stock is underpriced on P/E, 'cheap' on EV/EBITD. 

JHSF Participações S.A.

R$ 5.06

6

JHSF Participações S.A.

R$ 5.06

6

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

R$ 5.06

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