MRV (MRVE3), Even (EVEN3), Miter (MTRE3) and Melnick (MELK3): What Analysts Think of Fourth-Quarter Operating Data

While Brazil’s fourth-quarter earnings season has yet to begin, investors are watching the ramifications of operating previews already released by builders and developers that have been released in recent days.

eve Repercussions for the stock market I stayed for EzTec (EZTC3(e Plano and Plano)PLPL3), while on Tuesday (18) attention should turn to operating, reporting and verification (MRV) data (MRVE3), Even (EVEN3( Miter )MTRE3( H Melnick )3 . milk).

The sector’s shares witnessed, in this session, a day mostly of decline, also due to the macroeconomic scenario with higher interest rates. MRVE3 paper decreased by 2.18% at R$10.76, while the price for MELK3 decreased by 1.33% at R$3.70. Mitri decreased by 3.74%, to 6.44 Brazilian riyals, and also recorded a decrease by 1.78%, to 6.08 Brazilian riyals.

Check the analysis of the released previews:

MRV (MRVE3): related milestones, mixed data

MRV was introduced in the fourth quarter of 2021 upon launch of R$3.2 billion (up 52% ​​yoy and 55% q-o-q) and sales of R$2.4 billion (up 18% y/y and 19% q-o-q). ) Basis).

These figures were primarily driven by the sale of projects by AHS (a US subsidiary), partially offset by a cash burn of R$128 million due to higher payments from Brazilian subsidiaries (expected purchases of building materials), despite the strong generation of AHS funds of 107 Million Brazilian Real.

For Credit Suisse, the survey was positive on the strategic front, neutral on low-income operating metrics (in line with credit expectations) and negative on cash generation.

MRV had an impressive quarter in terms of strategic milestones, as the company accelerated launches at all branches (except Luggo) and hit relevant milestones. Thus, the company finished 2021 with 46% of sales outside of the Casa Verde Amarela program, solidifying its diversification strategy. On the other hand, lower-income operations, which are still the company’s core business, could have been better (sales decreased on a quarterly basis) and the cash-burning would have been adequate,” Swiss bank analysts point out.

Bradesco BBI notes that MRV operating numbers were strong with a very positive shift in diversification. The company’s Brazilian development operations showed good numbers, Urba showed solid growth, the Luggo-Brookfield deal took off and AHS returned to a strong sales quarter, they assess.

“In fact, the alternative business lines of MRV are gradually becoming relevant, which helps to meet the challenges of the core business of MRV (CVA),” evaluates BBI, which maintains a buy recommendation for MRVE3 at a target price of R$24 per share, and also highlights on the possibility of an upward consensus review fueled by AHS and Luggo.

XP, in turn, noted that the builder provided strong operating numbers for the fourth quarter of 2021, but it also highlighted the cash burn. The asset’s recommendation is neutral, with a target price of R$23.

Itaú BBA, in turn, believes that MRV posted a record number of launches and presales this quarter, buoyed by strong numbers from AHS. Major operations launches were also strong, while advance sales improved from the third quarter, albeit still modestly on a year-over-year basis. Cash generation was the weak point.

For Levante Ideias de Investimentos, it is remarkable that 46% of MRV sales came from outside the Casa Verde Amarela (CVA) program, the company’s main market which until then accounted for 85% of sales, while another 21.7% of sales came from the market. North America through AHS.

“An important factor that has helped the company balance this more challenging moment is the gradual reduction of its reliance on single financing (FGTS), the increase of its operations in the United States, plus it has started working on a new business model, rentier, which has strong appeal among the youth ‘,” Levante points out.

Even (EVEN3): versions are on the rise

It even saw a 68% increase in launches in the fourth quarter compared to 2020, reaching R$809 million. However, sales decreased by 37.4% to R$400 million.

Launches in 2021 increased 75% to R$ 2.39 billion. Even sales reached R$1.62 billion in the year, which is a 3% decrease compared to the previous year.

And the credit notes that it even posted a solid volume of launches, beating the bank’s estimates and nearly doubling the amount launched in 2020.

However, releases were largely underrated for studios and middle income groups, they estimated. “Sales were good, but slightly below our estimates, and impressively, the company was able to report an accelerated sales pace.”

Bank analysts have a positive view of EVEN’s strategy to reach a high-income audience and not expand the scale of its launches. However, the team does not see any change in industry dynamics that would make the outlook positive for the time being. Thus, they maintain a neutral recommendation on paper.

BBI noted Even’s operating numbers were better than expected, with consistent launches and higher sales. Despite the significant positive surprise in the fiscal year 2021 release estimates, they believe the inventory buildup seen in recent quarters could lead to a slowdown in 2022 — which, if confirmed, could undermine any increase in the bank’s earnings per share estimates ( EPS) for the year 2022.

However, the company’s valuation remains attractive to the bank, as analysts follow a superior recommendation (above market average performance) for the paper, with a target price of R$13.

Itaú BBA highlights that launches increased both quarterly and annually, and the pace of sales accelerated from smooth comparisons to the prior quarter, aided by decent launch sales.

In the meantime, XP sees the operational preview as neutral despite the strong releases. However, analysts reiterated a buy recommendation for Even, based on the attractive rating.

miter (MTRE3): Attention to increasing stocks

Miter reported net sales of R$314.4 million in the first quarter, up 113.6% from the previous quarter. Launches totaled R$1.1 billion in Q421 and R$1.8 billion in the year, reaching guidance Release date 2021.

The sales-to-supply (VSO) ratio for launches was 26.5% and 19.2% in the consolidated quarter for the quarter, even as R$775.1 million was launched in December alone.

Credit Suisse estimates Miter made a bold move in the fourth quarter, pushing ahead with launches despite the “more challenging” environment. Bank highlights that the company has reached guidance For the year (R$1.5 billion – R$2 billion), with the launch of R$1.8 billion in 2021. Despite the scale of the launches, the company has been able to maintain its sales pace practically stable, which enhances the success of its projects.

While credit acknowledges the company’s strong performance in the quarter and its inventory remains healthy, he remains cautious about it. Intensification of releases at this point in the cycle. Therefore, it has maintained a neutral rating for Miter.

The BBI analysis team claims that a file Intensification Miter launches are beginning to be reflected in an increase in stock, but he points out that this was already to be expected. The bank says it is not yet concerned about the slight drop in VSO in the quarter, as the launches were concentrated in the final days of the year, but it is important to follow the development of sales and the formation of inventories, in the midst of the easing. of the sector in progress.

Currently, Miter launches appear to have positive commercial traction and inventory appears to be sound, with most inventory built in the past six months (fresh produce), according to a BBI estimate.

The bank maintains a neutral valuation of Miter, and a target price of R$ 15.00, compared to Monday (17) at R$ 6.69.

For Itaú BBA, the highlight of the Miter preview was the improvement in pre-sales sales, which is to be expected due to the good sales pace of the launches. However, analysts also noted that the consolidated sales speed remained stable due to the strength Pipeline of versions.

Melnik (3 . milk): The speed of sales is highlighted

Melnik recorded net sales of R$195 million in the fourth quarter of 2021, an increase of 182% over R$69 million in the previous year. Hence, VSO was 16% in the period versus 11% in the previous year. Net sales increased 4% from 2020 to 2021, from R$584 million to R$607 million.

BBA estimates that the company delivered a strong sales performance, with Sales Velocity (VSO) accelerating from the previous quarter and exceeding estimates for 2021.

XP also considers the builder preview positive. The brokerage estimates that Melnick reported mixed operating data in the quarter, due to the increase in launches, in net sales, which positively affected sales velocity in the quarter, reaching 16% in the fourth quarter of 2021 versus 9% in the quarter the latter directly. previous quarter.

Additionally, cancellations amounted to 6% of total sales in the fourth quarter of 21 versus 8% in the third quarter of 21. XP reiterated Melnick’s positive views on which to base it. evaluation Attractive, it is currently trading at 0.6x P/VP.

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