Ultrapar Participacoes SA (UGP) AI Stock Analysis

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Ultrapar Participacoes SA

(NYSE:UGP)

Rating:77Outperform

Price Target:

$3.50

▲(6.06% Upside)

Ultrapar Participacoes SA's overall stock score is driven by its attractive valuation and positive technical indicators, suggesting potential for growth. While financial performance is stable, challenges in profitability and increased expenses from the earnings call highlight areas for improvement. The company's strategic focus on long-term growth is promising, but maintaining profitability remains crucial.

Positive Factors

Financial Health

Ultra's consolidated net debt decreased, indicating improved financial health.

Financial Performance

Ipiranga delivered a stronger-than-expected margin.

Negative Factors

Equity Income

Hidrovias’ equity income contribution was way lower than expected.

Operational Momentum

The lack of operational momentum, due to an oversupply and subdued demand environment, prevents a more bullish outlook on the stock.

Ultrapar Participacoes SA (UGP) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$3.55B

Dividend Yield3.72%

Average Volume (3M)2.01M

Price to Earnings (P/E)8.9

Beta (1Y)0.55

Revenue Growth-4.58%

EPS Growth-23.80%

CountryUS

Employees9,999

SectorEnergy

Sector Strength41

IndustryOil & Gas Refining & Marketing

Share Statistics

EPS (TTM)0.04

Shares Outstanding1,115,507,200

10 Day Avg. Volume1,731,053

30 Day Avg. Volume2,013,232

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.58

Enterprise Value/Revenue0.04

Enterprise Value/Gross Profit0.65

Enterprise Value/Ebitda1.01

Forecast

1Y Price Target

$3.75

Price Target Upside13.64% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Ultrapar Participacoes SA Business Overview & Revenue Model

Company DescriptionUltrapar Participações S.A. engages in the gas distribution, fuel distribution, and storage businesses primarily in Brazil, Mexico, Uruguay, Venezuela, other Latin American countries, the United States, Canada, the Far East, Europe, and internationally. Its Gas Distribution segment distributes liquefied petroleum gas to residential, commercial, and industrial consumers primarily in the South, Southeast, and Northeast regions of Brazil. The company's Fuel Distribution segment distributes and markets gasoline, ethanol, diesel, fuel oil, kerosene, natural gas for vehicles, and lubricants; operates convenience stores; and offers lubricant-changing and automotive specialized services. The company's Storage segment operates liquid bulk terminals primarily in the Southeast and Northeast regions of Brazil. As of December 31, 2021, the company operated through 7,104 Ipiranga service stations and 1,841 AmPm convenience stores; 1,149 Jet Oil franchises; 4 distribution centers; and 7 Ultracargo terminals with storage capacity of 983 thousand cubic meters. It also operates Abastece Aí, a digital payments app; and offers Km de Vantagens, a loyalty program. The company was founded in 1937 and is headquartered in São Paulo, Brazil.

How the Company Makes MoneyUltrapar generates revenue through several key streams. The primary source of income comes from its retail fuel distribution, primarily through Ipiranga-branded gas stations, which sell gasoline, diesel, and other fuel products to consumers. The company also profits from its chemical operations, producing petrochemical products and specialty chemicals that are sold to various industries. Additionally, Ultrapar has a significant logistics segment, managing storage and transportation services for fuels and chemicals, which contributes to its earnings. Strategic partnerships, such as those with suppliers and retailers, enhance its supply chain efficiency and market reach, further bolstering its revenue. Factors like market demand for fuel and chemicals, regulatory changes, and economic conditions in Brazil and surrounding regions also play critical roles in influencing Ultrapar's financial performance.

Ultrapar Participacoes SA Earnings Call Summary

Earnings Call Date:Aug 13, 2025

(Q1-2025)

% Change Since: 4.43%|

Next Earnings Date:Nov 12, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a mixed performance with significant strategic advancements, including capital increases and strategic focus on Hidrovias, offset by declines in recurring EBITDA, net income, and increased SG&A expenses. The company's strategic initiatives indicate a focus on long-term growth, but the current financial metrics show challenges in maintaining profitability.

Q1-2025 Updates

Positive Updates

Strong Performance of Hidrovias

Hidrovias showed strong performance due to improved navigability conditions and advancements in management. A BRL750 million sale agreement for the cabotage operation and a BRL1.2 billion capital increase were significant achievements.

Capital Increase and Strategic Focus

Ultrapar completed a BRL1.2 billion capital increase, reinforcing its strategic focus and reducing financial leverage. Ultrapar now controls more than 50% of Hidrovias, signaling confidence in its value-creation potential.

Debt Raised with Low Average Cost

Ultrapar raised a total of BRL1.4 billion in debt with a low average cost equivalent to 101% of the CDI, enhancing its financing capacity.

AmPm Stores Growth

Ipiranga's AmPm stores experienced a 12% same-store sales growth in the first quarter of 2025.

Lower Financial Expenses

Lower financial expenses partially offset the 20% year-over-year drop in net income.

Negative Updates

Recurring EBITDA Decrease

Recurring EBITDA totaled BRL1.183 billion, a 9% decrease compared to the first quarter of 2024, mainly due to the negative impact from the share of loss of Hidrovias.

Net Income Decline

Net income for the quarter totaled BRL502 million, a 20% drop year-over-year, driven by Hidrovias' negative impact.

CapEx Decrease

CapEx for the period was BRL460 million, a 5% decrease compared to the first quarter last year.

Increased SG&A Expenses

Ipiranga's SG&A increased by 80% compared to the first quarter last year due to higher personnel expenses and one-time expenses with fleet mobilization.

Ultragaz EBITDA Decrease

Ultragaz's EBITDA was BRL393 million, 2% lower than the first quarter last year due to worse margins and higher expenses.

Company Guidance

During the Ultrapar earnings call for the first quarter of 2025, the company shared various operational and financial metrics, highlighting its robust performance despite market volatility. Recurring EBITDA was reported at BRL1.322 billion, although this was reduced to BRL1.183 billion after accounting for a BRL139 million share of loss from Hidrovias. The net income stood at BRL502 million, marking a 20% year-over-year decline. CapEx for the quarter was BRL460 million, a 5% decrease from the prior year, while operational cash generation significantly improved by BRL576 million. Ultrapar's leverage increased from 1.4x to 1.7x due to a rise in net debt and lower EBITDA over the past 12 months. At Ipiranga, service station network adjustments and an SG&A increase of 80% were noted, alongside a recurring EBITDA of BRL826 million, up 6% year-over-year. Ultragaz's EBITDA decreased by 2%, totaling BRL393 million, influenced by Petrobras auction costs. Ultracargo maintained consistent results with a 1% increase in EBITDA to BRL166 million. The call also highlighted strategic moves, including a BRL750 million sale agreement in Hidrovias and a BRL1.2 billion capital increase, affirming Ultrapar's position as a controlling shareholder and signaling a focus on long-term strategic growth.

Ultrapar Participacoes SA Financial Statement Overview

Summary

Ultrapar Participacoes SA exhibits stable financial health with consistent revenue growth and operational efficiency. The company's leverage is moderate, supported by a strong equity position and effective cash flow management. However, there is room for improvement in profitability and monitoring debt levels remains crucial.

Income Statement

Positive

Ultrapar Participacoes SA shows a solid financial performance with a consistent revenue growth trend. The TTM revenue indicates a growth of 2.20% from the previous year. Gross profit margin stands at 6.37%, reflecting efficiency in managing production costs. The net profit margin is 1.66%, which, while positive, suggests room for improvement in profitability. The EBIT and EBITDA margins are 3.76% and 4.10% respectively, indicating stable operational efficiency.

Balance Sheet

Positive

The company's balance sheet reveals a moderate financial position with a debt-to-equity ratio of 0.99, suggesting balanced leverage. The equity ratio of 40.26% shows a healthy capital structure. Return on equity (ROE) is 14.90%, reflecting effective use of equity to generate profits. However, the total debt remains significant, indicating potential risks if interest rates rise or earnings decline.

Cash Flow

Positive

The cash flow statement demonstrates strong operational cash generation with an operating cash flow to net income ratio of 1.81, highlighting robust cash conversion. Free cash flow grew by 16.28% compared to the prior period, indicating effective capital management. While the free cash flow to net income ratio of 1.00 suggests all earnings are effectively translated into free cash flow, the cash flow from financing activities indicates a strategic reduction in debt.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	133.50B	126.05B	143.63B	109.73B	74.06B
Gross Profit	8.62B	9.32B	6.39B	4.90B	4.00B
EBITDA	5.06B	6.36B	3.25B	2.76B	2.56B
Net Income	2.36B	2.44B	1.80B	850.46M	893.38M
Balance Sheet
Total Assets	39.56B	38.25B	36.44B	39.01B	36.25B
Cash, Cash Equivalents and Short-Term Investments	4.62B	6.22B	6.14B	4.08B	7.69B
Total Debt	15.79B	13.30B	13.28B	17.73B	19.21B
Total Liabilities	23.73B	24.22B	24.27B	28.54B	26.34B
Stockholders Equity	15.16B	13.51B	11.71B	10.07B	9.53B
Cash Flow
Free Cash Flow	1.95B	2.54B	785.74M	1.31B	2.23B
Operating Cash Flow	3.74B	3.85B	2.00B	2.59B	3.14B
Investing Cash Flow	-6.39B	-1.02B	7.90B	724.14M	-2.14B
Financing Cash Flow	-1.23B	-2.49B	-6.91B	-3.36B	-592.33M

Ultrapar Participacoes SA Technical Analysis

Technical Analysis Sentiment

Positive

Last Price3.30

Price Trends

50DMA

3.10

Positive

100DMA

3.06

Positive

200DMA

2.99

Positive

Market Momentum

MACD

0.04

Negative

RSI

61.72

Neutral

STOCH

80.27

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UGP, the sentiment is Positive. The current price of 3.3 is above the 20-day moving average (MA) of 3.07, above the 50-day MA of 3.10, and above the 200-day MA of 2.99, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 61.72 is Neutral, neither overbought nor oversold. The STOCH value of 80.27 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UGP.

Ultrapar Participacoes SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UGP	77 Outperform	$3.55B	8.89	14.87%	3.72%	-4.58%	-23.80%
DINO	70 Outperform	$8.33B	35.13	-0.93%	4.46%	-14.58%	-107.50%
CSAN	57 Neutral	$1.87B	5.14	-69.81%	7.38%	-2.76%	-628.74%
Sector *	57 Neutral	£7.39B	-1.87	-6.21%	6.72%	6.34%	-82.38%
PBF	50 Neutral	$2.63B	―	-17.30%	4.72%	-18.73%	-236.79%
CVI	48 Neutral	$2.71B	268.82	-50.65%	10.20%	-15.98%	-160.88%
DK	41 Neutral	$1.26B	―	-200.75%	4.69%	-29.94%	-723.41%

* Energy Sector Average

Performance Comparison

UGP

Ultrapar Participacoes SA

3.30

-1.04

-23.96%

CVI

CVR Energy

27.06

1.27

4.92%

Delek US Holdings

21.76

1.34

6.56%

DINO

HF Sinclair Corporation

44.82

-1.72

-3.70%

PBF

PBF Energy

23.29

-11.80

-33.63%

CSAN

Cosan

4.05

-6.28

-60.79%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 13, 2025