The average target price of TRIS3.SA is 8.0 and suggests 14% upside potential. Usually, this means a HOLD recommendation among investment firms. This neutral recommendation suggests no significant price movement, up or down, in the next 12 months. The most optimistic analyst has a target price of 9.0. This translates into 28% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 6.0. This is equivalent to 15% downside potential in the worst case. 

Trisul S.A. engages in the construction and development of real estate properties in Brazil. It is also involved in the subdivision of plots of land; and purchase and sale of properties. The company develops real estate projects, including with ownership interest of third parties. The company was founded in 2007 and is based in São Paulo, Brazil.

Brazil

Trisul S.A.

Real Estate

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been low and below its peers. On average, the company pays dividends annually. 

TRIS3.SA reported revenue of BRL 1 347mn in the last 12 months, up 29% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS grew 40% from FY23 to BRL 0.95. Market expects EPS to reach BRL 0.98 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. When compared to its international counterparts in the same sector and industry (as shown above), the stock has exceeded their performances, leading by 41ppts in total. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is mildly favourable.

The company has reported good EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 20.1% in the last 12 months, up from 19.0% in FY23. 

Historically, TRIS3.SA has reported good net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 12.7%, a growth from 11.8% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 7.5%, above the peers. The consensus estimate for FY24 for RoCE is 12.1%, again ahead of the peers. 

Trisul S.A. reported a return on equity (RoE) of 12.2% in the last 12 months, up from 9.5% in FY23. The market consensus projects an RoE of 13.3% in FY24, again ahead of its peers. 

Another important profitability metric, return on assets (RoA), amounted to 5.9% in the last 12 months, an increase from 4.6% in FY23. The market analysts predict that RoA will be 6.4% in FY24, again stronger than its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.1 in the past several years. This ratio implies a average 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.

TRIS3.SA has below average trading liquidity. It will take at least a day or two for the average private investor to sell a common position under normal market conditions. Liquidity is usually very stable and remains mildly 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 very 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 resilient historical revenue growth and robust profitability, among the positive credit factors. Among the negative credit factors and we point to weak positions in its industry, poor working capital management.

In highly turbulent market conditions, TRIS3.SA is moderately volatile. In other words, the stock will fall more than 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 moderate. 

In normal market circumstances, TRIS3.SA is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from limited to average. We would also like to highlight the average intraday volatility of the instrument. 

Based on key historical and expected multiples, the stock is undervalued relative to its peers. Specifically, the stock is 'cheap' on P/E, undervalued on EV/EBITDA, underpriced on P/FCF. 

Trisul S.A.

R$ 7.02

4

Trisul S.A.

R$ 7.02

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

R$ 7.02

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