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WEG
(OTC:WEGZY)
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Rating:73Outperform
Price Target:
$10.00
▲(10.50% Upside)
Action:Reiterated
Date:07/24/26
The score is led by strong financial performance (fast TTM growth and durable margins with reasonable leverage), partially offset by weaker cash-flow conversion. The earnings call adds moderate support due to confident H2 growth expectations and high ROIC, but near-term headwinds (tariffs, FX, ramp-up costs) remain. Technicals are neutral and valuation is constrained by a high P/E despite a solid dividend yield.
Positive Factors
Accelerating Revenue Growth
Sustained TTM revenue growth near 41% indicates durable demand expansion across end markets and successful commercial execution. Over 2–6 months this momentum supports higher backlog conversion, economies of scale and resilience versus cyclical weakness in any single region or sector.
Negative Factors
Weaker Cash Conversion
Lower FCF-to-income and a recent drop in free cash flow growth signal working-capital strain and/or heavier investment absorption. This constrains liquidity for dividends, buybacks or opportunistic M&A and elevates sensitivity to cyclical revenue swings over the coming months.
Read all positive and negative factors
Positive Factors
Negative Factors
Accelerating Revenue Growth
Sustained TTM revenue growth near 41% indicates durable demand expansion across end markets and successful commercial execution. Over 2–6 months this momentum supports higher backlog conversion, economies of scale and resilience versus cyclical weakness in any single region or sector.
Read all positive factors
WEG (WEGZY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$39.02B
Dividend Yield4.2%
Average Volume (3M)25.10K
Price to Earnings (P/E)31.7
Beta (1Y)0.61
Revenue Growth6.11%
EPS Growth5.58%
CountryUS
Employees49,258
SectorIndustrials
Sector Strength72
IndustryElectrical Equipment & Parts
Share Statistics
EPS (TTM)1.50
Shares Outstanding4,197,318,000
10 Day Avg. Volume17,152
30 Day Avg. Volume25,104
Financial Highlights & Ratios
PEG Ratio12.04
Price to Book (P/B)11.93
Price to Sales (P/S)5.19
P/FCF Ratio54.51
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
WEG Business Overview & Revenue Model
Company Description
WEG SA engages in the production and trade of capital goods such as electric motors, generators and transformers, gear units, and geared motors. It operates through the Brazil and Foreign segments. The Brazil segment covers industry and energy ope...
How the Company Makes Money
WEG makes money primarily by selling industrial electrical equipment and related solutions to customers through direct sales and distribution channels. Its core revenue streams come from: (1) Equipment sales: revenue from manufacturing and selling...
WEG Earnings Call Summary
Earnings Call Date:Jul 22, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 21, 2026
Earnings Call Sentiment Neutral
The call presented a balanced picture: operational and strategic strengths (healthy margins, rising ROIC, strong international/local-currency growth, active CapEx program and footprint diversification) are offset by near-term headwinds (small revenue decline, EBITDA reduction in absolute terms, tariff uncertainty, FX effects, rising input and ramp-up costs). Management expressed confidence in returning to revenue growth in the remainder of the year and emphasized mitigation actions and long-term capacity build-out.Positive Updates
Stable Profitability Despite Revenue Pressure
EBITDA margin remained healthy at 21.8% in Q2. EBITDA was BRL 2.2 billion (only down 2.1% YoY) while management highlighted margin resilience supported by favorable product mix and cost pass-throughs.
Negative Updates
Slight Decline in Net Operating Revenue
Net operating revenue decreased 0.6% versus Q2 2025, driven mainly by the absence of centralized solar generation deliveries in Brazil and FX conversion effects reducing BRL-reported growth.
Read all updates
Q2-2026 Updates
Positive
Negative
Stable Profitability Despite Revenue Pressure
EBITDA margin remained healthy at 21.8% in Q2. EBITDA was BRL 2.2 billion (only down 2.1% YoY) while management highlighted margin resilience supported by favorable product mix and cost pass-throughs.
Read all positive updates
Company Guidance
WEG reiterated a constructive outlook: demand is “positive abroad” and the company expects revenue growth to resume in H2‑2026 as the 2025 comparison base normalizes, while continuing to execute its BRL 3.6 billion 2026 investment program (BRL 795 million invested in Q2; ~BRL 1.4 billion spent H1), with Q2 investments split ~45% Brazil / 55% abroad and a new Itajaí BESS line adding ~2 GW; capacity expansions have added roughly 10–15% mid‑year (bringing the announced increase to ~25%) with the remaining ~75% to be operational early 2027 and full optimization targeted for 2027–2028. Key Q2 metrics referenced alongside the guidance were: net operating revenue -0.6% YoY, EBITDA BRL 2.2 billion (-2.1% YoY) with a 21.8% EBITDA margin, ROIC 33.6% (+0.7 pp), product mix ~61% short‑cycle / 39% long‑cycle, and the manufacturing footprint to mitigate U.S. tariffs (41% produced in Mexico, 33% produced/sold in the U.S., 20% Brazil, 4% other); management noted the new Section 301 tariff at 25% (potential cumulative outcome up to ~37%) and said it will continue mitigation actions while monitoring pricing, commodity pass‑through and ramp‑up effects.WEG Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
82
Very Positive
Cash Flow
68
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 40.29B | 40.00B | 37.99B | 32.50B | 29.90B | 23.56B |
| Gross Profit | 12.88B | 12.50B | 12.81B | 10.80B | 8.70B | 6.96B |
| EBITDA | 9.74B | 8.70B | 8.89B | 7.37B | 5.76B | 4.90B |
| Net Income | 6.28B | 6.25B | 6.04B | 5.73B | 4.21B | 3.59B |
Balance Sheet | ||||||
| Total Assets | 46.59B | 42.62B | 41.49B | 31.50B | 28.13B | 23.93B |
| Cash, Cash Equivalents and Short-Term Investments | 8.79B | 7.28B | 8.00B | 7.08B | 4.98B | 3.22B |
| Total Debt | 5.83B | 5.44B | 4.42B | 3.39B | 4.01B | 2.11B |
| Total Liabilities | 26.43B | 24.08B | 18.36B | 13.64B | 12.89B | 9.92B |
| Stockholders Equity | 18.83B | 17.41B | 22.20B | 17.34B | 14.83B | 13.60B |
Cash Flow | ||||||
| Free Cash Flow | 4.15B | 3.81B | 5.40B | 5.36B | 1.81B | 92.04M |
| Operating Cash Flow | 7.00B | 6.32B | 7.25B | 7.02B | 2.98B | 939.38M |
| Investing Cash Flow | -3.04B | -2.85B | -4.09B | -1.71B | -1.35B | -683.87M |
| Financing Cash Flow | -1.01B | -4.28B | -2.76B | -2.96B | 191.91M | -1.44B |
WEG Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $32.63B | 34.03 | 9.46% | 0.09% | 7.85% | 88.74% | |
73 Outperform | $39.02B | 31.68 | 32.73% | 4.33% | 6.11% | 5.58% | |
68 Neutral | $53.42B | 49.70 | 33.32% | 1.18% | 10.45% | 21.30% | |
67 Neutral | $27.56B | 24.51 | 15.00% | 1.03% | 7.56% | -49.98% | |
64 Neutral | $10.45B | 16.32 | 17.13% | 1.69% | -2.15% | 8.39% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $27.39B | 18.40 | -27.26% | 2.36% | 5.24% | 2.75% |
* Industrials Sector Average
WEGZY
WEG
9.50
2.59
37.38%
DOV
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210.84
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PNR
Pentair
69.90
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-30.67%
ROK
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441.80
113.85
34.72%
IR
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88.24
12.04
15.80%
OTIS
Otis Worldwide
73.83
-11.76
-13.74%
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.