As accounting failures in the range of R$ 20 billion identified in Americana’s balance sheet (AMER3) brought a positive effect on the business of the Magazine Luiza (MGLU3)what led the Ibovespa gains, with a 61.7% jump in the value of its shares.
With the valuation, the The retailer’s shares closed the month at R$4.43what raised the company’s market value to almost BRL 30 billion. The rise, however, is still far from replace the loss of BRL 10 billion accumulated by Magazine Luiza in the last yearaccording to platform data TC Economatica.
In the month, Americanas shares melted by almost 90%, from R$12 to R$1.75, and the company had its negotiations interrupted by B3, administrator of the Brazilian Stock Exchange. The decision was prompted by the retailer’s entry into a judicial recovery process with debts that total BRL 41.2 billion, owed to 7,720 creditors.
Before the move, a XP Investimentos raised from BRL 4.50 to BRL 5 the target price of Magazine Luiza shares, but maintained the company’s stock purchase rating as “neutral”. “We believe that Magazine Luiza’s market share gains in the restructuring of Americanas are, mainly, priced after the rally of approximately 60% in the accumulated of the year”, affirm the XP analysts.
Denis Medina, economist and professor at FAC-SP (Faculty of Commerce of São Paulo)explains that the crisis at Americanas broadens the understanding of investors that the company will not be able to serve the families that are customers of the stores, which opens up space for direct competitors.
“There is a group of consumers who frequently consume at Lojas Americanas. If it shrinks and loses space, these customers will continue shopping in other markets”, says Medina, citing Magazine Luiza and Via Varejo, owner of Casas Bahia e Ponto, as possible direct beneficiaries of the movement.
When assessing the adverse performance of the Via Varejo (VIIA3)with zero variation in January, Medina claims that the company does not have the same space as competitors in the digital environment, mainly in terms of visibility and scope of the marketplace.
“Precisely because of the digital presence that Magazine Luiza benefited from in the past, by taking its shares to abrupt increases, which were recently reversed. […] An increase in prices now is, in part, an adjustment to that exacerbated fear and the capture of results due to the problems in Americanas”, he adds.