Analyst Mauricio Cepeda from Morgan Stanley maintained a Sell rating on Afya (AFYA – Research Report) and increased the price target to $19.00 from $17.00.
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Mauricio Cepeda has given his Sell rating due to a combination of factors impacting Afya’s future prospects. Despite the company’s strong performance in the first quarter of 2025, with impressive growth in net revenue and adjusted EBITDA, there are concerns about the sustainability of this growth. The increasing supply in the industry could pressure Afya’s occupancy rates, which, while currently stable, may face challenges moving forward.
Another significant factor influencing the Sell rating is the new tax rule under OECD’s Pillar Two, which has already led to a tax provision in the current quarter. Although Afya has taken legal action and the material impact is not expected until 2026, this tax rule creates uncertainty and potential overhang on future cash flows. These elements combined suggest a cautious outlook, prompting the Sell recommendation despite the company’s recent strong financial results.
According to TipRanks, Cepeda is an analyst with an average return of -6.0% and a 30.00% success rate.