Medical education group Afya climbs after CS upgrades to 'outperform'

Afya

08/04/2022 19:34

** Shares of Brazilian medical education group  AFYA.O  up
6.7% to $15.49 after Credit Suisse upgrades the stock to
"outperform" from "neutral"
    ** CS (PT: $19) says AFYA's undergraduate medical schools
business provides a relatively stable cash flow and predictable
growth
    ** Believes co may be a defensive play amid the challenging
macroeconomic scenario as the current price does not reflect the
cash flow profile and risk
    ** Adds that preparatory and specialization courses have a
harder competitive environment, but there is considerable space
for market share growth despite recent pressures on the
businesses due to pandemic
    ** AFYA on its annual investor day forecast R$1.2 bln 
 ($254.31 mln) additional revenue from digital services by 2028
and brokerage sees this an upside to its thesis
    ** However, CS cautions that a slower or lack of approval of
new medical seats, insufficient recovery of the residency prep
courses or ramp-up of digital businesses could challenge its
conviction on the stock
    ** As of last close, stock had fallen 7.6% YTD


($1 = 4.7187 reais)

 (Reporting by Devik Jain in Bengaluru)
 ((Devik.Jain@thomsonreuters.com; within U.S. +1 646 223 8780;
outside U.S. +91 80 6182 2062; ;))