The pandemic has severely punished all tourism companies. But since last year, with the vaccination, they had been recovering. The rise was short-lived: with the outbreak of the war between Russia and Ukraine, these stocks fell again. Tourism companies in Brazil have already lost R$ 7.8 billion in market value.
The losses of CVC (CVCB3), Gol (COLL4) and Azul (BLUE4) in these four months of conflict are, on average, three times greater than the retraction of the Ibovespa.
While, from February 24th to June 30th, the Ibovespa dropped 13%, the fall in the market value of CVC reached 43%, Gol to 43% and Azul to 50%. In other words, the average of the three (31%) is triple the percentage of retraction of the Ibovespa B3.
Before the war, CVC was worth R$2.8 billion. Now, it is at R$ 1.6 billion. Gol Linhas Inteligentes fell from R$ 5.4 billion to R$ 3.1 billion. And finally, Azul, which was estimated at R$8.6 billion, is now worth R$4.28 billion. Adding all these losses, there are R$ 7.82 billion in devaluation of companies.
“The war unbalanced the oil supply chain, and fuels correspond to more than 30% of airline costs”, says Marcelo Linhares, president of the corporate travel management platform Onfly.
This year alone, aviation fuel accumulates a high of 64.3%, according to the most recent data from the Brazilian Association of Airlines (Abear).
Before the war, Gol shares, for example, were worth R$21.39 in February. Today it is at R$ 9.20. CVC dropped from R$12.90 to R$7 and Azul from R$27.68 to R$12.69. Azul and GOL already had sales volume in the first quarter above pre-pandemic levels and CVC had approximately 70% of demand.
“In my view, the sector will only recover with the end of the conflict with Ukraine”, says Linhares.
And what to do with the shares?
BTG’s recommendation is to buy the GOL share, with the expectation that in 12 months the share will cost R$31, up 243%. It is the same recommendation for Azul, with a target price of R$47, an appreciation of 280.6%. For CVC, the bet is also on purchase, with a target price of R$ 33 – this is the highest appreciation, of 376.2%.
Elevem also recommends buying for both. “Amid significant increases in aviation kerosene, airlines face challenges to maintain their level of profitability. But the redistribution of slots of bankrupt Avianca in Congonhas brings growth potential for them, especially Azul”, evaluated Eleven.
XP has a back foot and has classified GOLL4 and BLUE4, both as neutral: better neither to buy nor to sell. About CVC, Eleven calculates that the action can cost R$ 18 and that’s why it’s a good buy.