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Is Companhia Brasileira De Distribuicao (BVMF:PCAR3) Potentially Undervalued?

Simply Wall St · 07/17 09:02

Companhia Brasileira De Distribuicao (BVMF:PCAR3), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the BOVESPA. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Companhia Brasileira De Distribuicao’s outlook and value based on the most recent financial data to see if the opportunity still exists.

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What's The Opportunity In Companhia Brasileira De Distribuicao?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 18% below our intrinsic value, which means if you buy Companhia Brasileira De Distribuicao today, you’d be paying a reasonable price for it. And if you believe the company’s true value is R$4.32, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Companhia Brasileira De Distribuicao’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

See our latest analysis for Companhia Brasileira De Distribuicao

Can we expect growth from Companhia Brasileira De Distribuicao?

earnings-and-revenue-growth
BOVESPA:PCAR3 Earnings and Revenue Growth July 17th 2025

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Companhia Brasileira De Distribuicao's earnings over the next few years are expected to increase by 81%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in PCAR3’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on PCAR3, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that Companhia Brasileira De Distribuicao has 2 warning signs and it would be unwise to ignore these.

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