Lavoro downgraded to Underperform from Outperform at Oppenheimer

Oppenheimer analyst Kristen Owen double downgraded Lavoro (LVRO) to Underperform from Outperform without a price target The firm believes tight credit conditions in Brazil and the overhang of lengthened cash conversion cycles “create a handicap to near-term estimates.” While sentiment within the Brazilian agriculture industry has improved on the back of healthier commodities prices and U.S. trade policy, Oppenheimer is cautious on the outlook over the next 6-12 months “as the country grapples with persistently high inflation, tight monetary policy, and an upcoming election cycle,” the analyst tells investors in a research note. The firm says the overhang of the bottoming ag cycle and limited working capital capacity “create a handicap” to Lavoro’s ability to participate in the upside from improved end user demand.