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Cosan (CSAN)
NYSE:CSAN
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Cosan
(NYSE:CSAN)
Rating:64Neutral
Price Target:
$6.00
▲(2.21%Upside)
Positive Factors
Debt Management
The company raised R$2.5bn in Q4 at a cost below its average, enabling it to prepay the 2027 bond and improve its debt profile.
Financial Strategy
Cosan's cash flow generation of R$552mn was supported by dividends inflow and asset sales, showcasing effective financial strategy.
Shareholder Returns
Cosan announced a buyback program of up to 115mn shares, representing 6% of total outstanding shares, which could enhance shareholder value.
Negative Factors
Financial Performance
Cosan reported a weak 4Q24 with a R$9.3bn Net Loss, attributed to several negative factors including a negative equity pickup from Raizen.
Market Concerns
Share underperformance is linked to investor concerns about the HoldCo's leverage and return on recent investments amid rising interest rates in Brazil.
Cosan (CSAN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.83B
Dividend Yield5.19%
Average Volume (3M)1.45M
Price to Earnings (P/E)5.1
Beta (1Y)0.56
Revenue Growth-2.76%
EPS Growth-628.74%
CountryUS
Employees53,498
SectorEnergy
Sector Strength46
IndustryOil & Gas Refining & Marketing
Share Statistics
EPS (TTM)-0.08
Shares Outstanding464,661,250
10 Day Avg. Volume1,764,265
30 Day Avg. Volume1,445,917
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)1.31
Price to Sales (P/S)0.00
P/FCF Ratio3.72
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$12.20Price Target Upside107.84% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Cosan Business Overview & Revenue Model
Company DescriptionCosan S.A. (CSAN) is a leading Brazilian conglomerate primarily involved in the energy and logistics sectors. The company operates through multiple business units, including Raízen, which is a joint venture with Royal Dutch Shell in the production and distribution of ethanol, sugar, and energy; Comgás, a leading natural gas distributor in Brazil; and Moove, which focuses on the production and distribution of lubricants. Cosan is also involved in logistics and infrastructure, providing integrated services that support its vast energy operations.
How the Company Makes MoneyCosan generates revenue through a diversified portfolio of businesses. The key revenue streams include the production and sale of sugar, ethanol, and bioenergy through Raízen, which is one of the largest in its sector globally. This subsidiary also operates a network of Shell-branded service stations in Brazil. Cosan's subsidiary Comgás contributes significantly to revenue through the distribution of natural gas to industrial, residential, and commercial customers in Brazil. Moove adds to the revenue by producing and selling lubricants under various brands. Additionally, Cosan benefits from its logistics and infrastructure services, which support the transportation and distribution needs of its energy operations. Strategic partnerships, such as the joint venture with Shell, enhance its market reach and operational capabilities, contributing to its overall earnings.
Cosan Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q1-2025)
| % Change Since: 7.90%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong EBITDA performance and debt reduction as notable positives. However, this was countered by a significant net loss, operational disruptions at Moove, and challenges in Rumo and Raízen. Safety issues and the need for improving the capital structure added further concerns.Q1-2025 Updates
Positive Updates
Strong EBITDA Performance
Cosan reported approximately R$5 billion of EBITDA under management for the first quarter of 2025, excluding the results of Vale.
Net Debt Reduction
The company achieved a significant reduction in net debt, closing the quarter at R$17.5 billion, primarily due to the divestment of the Vale stake.
Increased Natural Gas Volumes
Compass reported increased natural gas volumes, supported by the acquisition of Compagas and better margins from a favorable mix in the residential segment.
Successful Liability Management
Cosan raised R$11.5 billion through various financial activities, improving debt maturity and reducing costs, with no amortizations until 2028.
Negative Updates
Net Loss Reported
Cosan experienced a net loss of R$1.8 billion for the quarter.
Operational Challenges at Moove
Moove's performance was significantly impacted by a fire at the Ilha do Governador industrial complex, affecting its production capacity.
Lower Volumes at Rumo
Rumo faced lower volumes due to a delay in the crop season, which may impact its ability to meet annual guidance.
Challenging Quarter for Raízen
Raízen reported difficulties with lower volumes in sugar operations and reduced results from trading activities.
Safety Challenges
The company reported fatalities in its operating companies, highlighting ongoing safety challenges despite commitments to high safety standards.
Company Guidance
During Cosan's first quarter 2025 earnings call, key financial metrics were discussed, highlighting the company's performance and strategic initiatives. The quarter saw an EBITDA of approximately R$5 billion, while the net loss stood at R$1.8 billion. A significant reduction in net debt was achieved, closing at R$17.5 billion, primarily due to the divestment of the Vale stake. Dividends received from Compass bolstered the interest coverage ratio to 1.2 times for the quarter. Operational challenges included lower volumes at Rumo and a fire affecting Moove's performance. Despite these challenges, Compass experienced a rise in natural gas volumes, and Radar saw increased EBITDA from lease agreements and land sales. The company actively managed liabilities, resulting in R$21.7 billion in gross debt and an average debt duration of 6.4 years. Looking forward, Cosan is focused on further divestments and optimizing its capital structure.Cosan Financial Statement Overview
Summary
Cosan's financial performance is characterized by strong revenue growth and cash flow generation. However, its profitability is hindered by high leverage and net losses. The high debt-to-equity ratio poses a risk, highlighting the need for improved net income and equity position for future stability.Income Statement
Cosan's income statement shows a mixed performance. The gross profit margin for the latest year was approximately 31.2%, indicating effective cost management. However, the net profit margin was negative due to a significant net loss. Revenue growth from 2023 to 2024 was about 11.36%, showing positive growth momentum. Despite a solid EBIT margin of 21.14%, the company faces profitability challenges.65
Positive
Balance Sheet
The balance sheet reflects a high debt-to-equity ratio of approximately 6.69, indicating heavy reliance on debt financing, which can be risky. The equity ratio stands at 7.72%, suggesting a low proportion of assets financed by equity. Return on equity is negative due to net losses, highlighting the need for improved profitability. Despite this, the company maintains substantial cash reserves.60
Neutral
Cash Flow
Cosan's cash flow statement shows strong operating cash flow relative to net income, reflecting effective cash management. Free cash flow grew by 30.9% from the previous year, suggesting an improving cash position. While the free cash flow to net income ratio is positive due to cash generation, the net income loss tempers the overall cash flow assessment.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 43.95B | 39.47B | 39.74B | 24.91B | 13.51B | Gross Profit |
| 13.71B | 10.92B | 8.98B | 6.34B | 3.69B | EBIT |
| 7.69B | 6.88B | 5.93B | 8.70B | 2.58B | EBITDA |
| 13.22B | 14.12B | 6.87B | 4.53B | 1.39B | Net Income Common Stockholders |
| -9.42B | 1.09B | 2.82B | 6.31B | 859.48M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 20.18B | 18.27B | 15.96B | 21.04B | 17.62B | Total Assets |
| 141.27B | 139.87B | 134.48B | 97.84B | 83.71B | Total Debt |
| 72.97B | 62.18B | 56.52B | 48.93B | 45.25B | Net Debt |
| 56.06B | 47.52B | 43.22B | 32.75B | 31.61B | Total Liabilities |
| 101.87B | 88.88B | 86.32B | 68.97B | 62.89B | Stockholders Equity |
| 10.90B | 20.96B | 20.65B | 14.74B | 5.26B |
| Cash Flow | Free Cash Flow | |||
| 5.25B | 4.01B | 5.44B | 1.16B | 1.09B | Operating Cash Flow |
| 13.08B | 10.28B | 9.97B | 5.22B | 2.14B | Investing Cash Flow |
| -4.49B | -4.30B | -20.61B | 5.01B | -2.34B | Financing Cash Flow |
| -6.61B | -4.52B | 8.17B | 1.05B | -1.54B |
Cosan Technical Analysis
Positive
5.87
Price Trends
5.34
Positive
5.29
Positive
6.66
Negative
Market Momentum
0.15
Negative
56.92
Neutral
69.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSAN, the sentiment is Positive. The current price of 5.87 is above the 20-day moving average (MA) of 5.61, above the 50-day MA of 5.34, and below the 200-day MA of 6.66, indicating a neutral trend. The MACD of 0.15 indicates Negative momentum. The RSI at 56.92 is Neutral, neither overbought nor oversold. The STOCH value of 69.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CSAN.
Cosan Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $3.20B | 8.02 | 14.87% | 3.67% | -4.58% | -23.80% | |
72 Outperform | $6.93B | 35.13 | -1.49% | 5.43% | -11.17% | -109.60% | |
64 Neutral | $2.83B | 5.14 | -69.81% | 5.19% | -2.76% | -628.74% | |
57 Neutral | $7.22B | 3.11 | -4.49% | 5.63% | 0.82% | -49.15% | |
53 Neutral | $2.39B | 268.82 | -27.14% | 8.42% | -16.21% | -130.18% | |
51 Neutral | $1.14B | ― | -151.69% | 5.28% | -29.23% | -931.43% | |
44 Neutral | $2.26B | ― | -18.01% | 5.50% | -16.30% | -160.78% |
* Energy Sector Average
Performance Comparison
CSAN
Cosan
5.87
-4.05
-40.83%
CVI
CVR Energy
23.41
-2.85
-10.85%
DK
Delek US Holdings
18.62
-5.36
-22.35%
DINO
HF Sinclair Corporation
35.61
-15.63
-30.50%
UGP
Ultrapar Participacoes SA
2.90
-1.32
-31.28%
PBF
PBF Energy
17.94
-27.80
-60.78%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.