Zacks Investment Research Lowers Azul (AZUL) to Sell

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Zacks Investment Research cut shares of Azul (NYSE:AZUL) from a hold rating to a sell rating in a research report released on Tuesday.

According to Zacks, “Shares of Azul have lost more than 29% of their value so far this year due to multiple headwinds. Also, high fuel costs are limiting bottom-line growth and are expected to continue doing so in the remainder of the year. Devaluation of the Brazilian Real is an added concern. The company estimates an increase in costs of R$800 million and R$900 million owing to currency fluctuation and fuel price, respectively, in 2018. In fact, Azul trimmed its guidance for current-year operating margin due to these concerns. Operating margin is anticipated to be between 9% and 11%. Previous outlook had called for the metric to lie between 11% and 13%. We are also concerned about its high debt levels. The negative sentiment surrounding the stock can be made out from the 21.4% decline in the Zacks Consensus Estimate for current-quarter earnings over the last 60 days. However, the company's efforts to modernize its fleet are impressive.”

AZUL has been the subject of several other reports. Buckingham Research dropped their price objective on shares of Azul from $32.00 to $30.00 and set a buy rating for the company in a research note on Wednesday, June 13th. Goldman Sachs Group began coverage on shares of Azul in a research note on Monday, July 16th. They set a buy rating and a $33.40 price objective for the company. Finally, ValuEngine lowered shares of Azul from a hold rating to a sell rating in a research note on Wednesday, June 6th. Three investment analysts have rated the stock with a sell rating and four have assigned a buy rating to the stock. The company presently has an average rating of Hold and a consensus target price of $32.44.

NYSE AZUL opened at $15.85 on Tuesday. The company has a quick ratio of 0.90, a current ratio of 0.95 and a debt-to-equity ratio of 1.15. The firm has a market cap of $5.13 billion, a price-to-earnings ratio of 10.43 and a beta of 0.76. Azul has a 52 week low of $15.53 and a 52 week high of $35.05.

Azul (NYSE:AZUL) last posted its quarterly earnings data on Thursday, August 9th. The company reported ($0.11) EPS for the quarter, topping the consensus estimate of ($0.15) by $0.04. The company had revenue of $562.39 million during the quarter, compared to analyst estimates of $585.84 million. Azul had a net margin of 8.24% and a return on equity of 24.66%. analysts predict that Azul will post 1.21 EPS for the current fiscal year.

Large investors have recently added to or reduced their stakes in the company. BlackRock Inc. lifted its position in shares of Azul by 7.4% during the first quarter. BlackRock Inc. now owns 7,616,305 shares of the company’s stock worth $264,667,000 after purchasing an additional 527,979 shares during the last quarter. Twin Focus Capital Partners LLC bought a new stake in shares of Azul during the second quarter worth $245,000. Engineers Gate Manager LP bought a new stake in shares of Azul during the second quarter worth $398,000. Federated Investors Inc. PA lifted its position in shares of Azul by 2.9% during the first quarter. Federated Investors Inc. PA now owns 1,224,300 shares of the company’s stock worth $42,544,000 after purchasing an additional 34,100 shares during the last quarter. Finally, Zweig DiMenna Associates LLC bought a new stake in shares of Azul during the second quarter worth $5,399,000. Institutional investors and hedge funds own 6.77% of the company’s stock.

About Azul

Azul SA provides passenger and cargo air transportation services in Brazil. As of March 31, 2018, it operated 739 daily flights to 106 destinations through a network of 206 non-stop routes with a fleet of 120 aircraft. The company was incorporated in 2008 and is headquartered in Barueri, Brazil.

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