Morgan Stanley analyst Javier Martinez de Olcoz Cerdan initiated coverage of Rumo with an Overweight rating and R$30 price target. The firm forecasts grains production and exports growth in Brazil and on top of growing volumes anticipates freight prices moving higher. Given this forecast, the firm sees a structural inflection in Rumo’s ROIC “that doesn’t seem to be priced in by the market,” the analyst tells investors.
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