The U.S. dollar has seen a consistent rise, breaking past R$ 5.40 and peaking at R$ 5.45 on Tuesday. This increase marks an over 10% gain this year, reaching its highest point since July 2022.
Factors at home and abroad have fueled this trend, including internal financial worries and global political uncertainties.
Investors are consequently looking towards the stock market for security or to capitalize on these shifts.
Banks and analysis firms are advising on which stocks to embrace and which to steer clear of in this economic climate.
Companies that earn in dollars, like those in the mining, oil, and paper industries, generally stand to gain.
Similarly, local agribusinesses benefit as they price their goods in dollars. Yet, airlines and some retail sectors are struggling with the elevated dollar.
Recently, the Italian BBA recommended six stocks based on their valuations:
1. PRIO (PRIO3): Priced at three times EV/Ebitda with strong cash flow returns.
2. Suzano (SUZB3): Offers a 20% discount on average EV/Ebitda rates.
3. JBS (JBSS3): Stands at six times EV/Ebitda with upward earnings adjustments.
4. SLC (SLCE3): A major name in agribusiness, also at six times EV/Ebitda.
5. Gerdau (GGBR4): Valued below four times EV/Ebitda, with positive financial revisions.
6. Embraer (EMBR3): Leads with the best performance on the Ibovespa this year.
These stocks are attractive due to their strong ties to commodity markets, balancing out their cost vulnerabilities.
XP has listed promising stocks such as BRF (BRFS3), Petrobras (PETR3 and PETR4), Ambipar (AMBP3), and Vale (VALE3).
Their focus has been on evaluating performance against currency fluctuations over the past year.
Santander has identified commodity-focused firms as solid investment shields, especially in sectors like metals and mining and oil and gas.
They’ve also spotlighted Vale for its positive reaction to currency changes and forthcoming corporate developments expected later this year.
However, not all sectors fare well with a strengthening dollar. Airlines such as Gol (GOLL4) and Azul (AZUL4) face challenges due to their high dollar debts and limited dollar earnings.
Impact on Retailers and Industrial Sectors
Retailers like Renner (LREN3), C&A (CEAB3), and Hering (SOMA3) also suffer from increased costs due to their reliance on dollar-priced resources.
Santander further notes potential risks for companies heavily dependent on dollar-based costs or debts, even if their revenues are somewhat dollar-aligned.
This situation is observed with Usiminas (USIM5), where despite operational improvements, the bank advises caution due to uncertain local steel prices.
As the dollar’s ascent reshapes financial landscapes, investors are wisely adjusting their portfolios, seeking stocks that not only withstand but also capitalize on these changes.
This scenario underscores the intricate dance between currency fluctuations and global trade.
Strategic choices can either shield investments from turbulence or harness the winds of change for gain.
Live Market IntelligenceBrazil — Live Market Board
Rio Times · Live Market Intelligence
Brazil — Live Market Board
+0.66%
172,457.76
+0.66%
71,204.98
-0.84%
10,660.94
+0.34%
2,848,945
—
2,452.46
-0.02%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 172,457.76 | +0.66% | +9.73% | 171,324.31 | 172,715 | 171,132 | — |
| USD/BRL | 5.67 | +0.45% | +7.09% | 5.64 | 5.67 | 5.63 | — |
| SELIC | 13.75% | — | — | — | — | — | |
| PETR4 | 45.30 | +1.34% | +39.43% | 44.70 | 45.44 | 44.62 | 23,431,200 |
| VALE3 | 63.50 | -0.70% | -3.30% | 63.95 | 64.24 | 63.12 | 11,175,700 |
| ITUB4 | 42.27 | +1.42% | +7.66% | 41.68 | 42.56 | 41.62 | 19,532,400 |
| BBDC4 | 14.52 | +1.40% | -25.46% | 14.32 | 14.54 | 14.27 | 32,353,600 |
| BBAS3 | 15.10 | -2.45% | -32.89% | 15.48 | 15.60 | 14.98 | 85,573,900 |
| B3SA3 | 14.89 | +0.88% | +2.90% | 14.76 | 14.94 | 14.53 | 34,792,900 |
| ABEV3 | 15.79 | +0.25% | +15.85% | 15.75 | 15.83 | 15.64 | 13,254,800 |
| WEGE3 | 51.31 | -0.66% | +14.48% | 51.65 | 52.05 | 50.93 | 7,741,000 |
| PRIO3 | 63.30 | +0.00% | +58.93% | 63.30 | 63.83 | 62.65 | 10,460,300 |
| SUZB3 | 54.77 | -2.27% | +14.92% | 56.04 | 55.98 | 54.66 | 3,845,300 |
| RENT3 | 30.07 | +1.66% | -28.47% | 29.58 | 30.35 | 29.58 | 7,599,300 |
| AZZA3 | 15.91 | -5.86% | -45.85% | 16.90 | 17.10 | 15.72 | 6,641,600 |
| CSNA3 | 3.72 | -12.06% | -56.79% | 4.23 | 4.14 | 3.71 | 54,060,600 |
| GGBR4 | 24.73 | -0.96% | +30.78% | 24.97 | 25.09 | 24.53 | 5,458,200 |
| ENEV3 | 26.81 | -0.70% | +38.98% | 27.00 | 27.09 | 26.64 | 5,990,500 |
This article was produced by The Rio Times’ automated AI newsroom. Editorial responsibility: Matthias Camenzind, Publisher and Editor-in-Chief. The Rio Times also runs Ask Rio Times, which answers from 100,000+ of our own articles, the daily Latin America Power Map, and prediction-market odds on elections and markets.. How we use AI · Report an error
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