Ultrapar Rated a Sell

IIR Group issued a SELL recommendation on the Brazilian energy company Ultrapar Participacoes S.A. (NYSE: UGP) on December 17, with a new price target for the company's ADR at US$16.03. Although IIR anticipates a 9% fundamental downside to the share, the outlook for the ADR is worse, based on an anticipated decline of the Brazilian Reais by 24% over the next 6-12 months.

Ultrapar's ADR closed Wednesday's trading session at US$21.97, with an intraday high of US$22.47. The target price of US$16.03 represents a potential downside of -27% in a 6-12 month perspective.

UGP has a market cap of US$2.93 bln, and is trading at a P/E of 15.85, with a YTD performance of -36.58%.

The company reported EBITDA at R$263 mln (US$105 mln) for 3Q'08, up 20% from 3Q'07, and a net income of R$117 mln (US$47 mln).

Ultrapar's lates interim statements can be found in our download section.