Ultrapar initiated with an Underperform at Jefferies

Jefferies initiated coverage of Ultrapar with an Underperform rating and $3.30 price target. The analyst likes the turnaround story of the company’s Ipiranga fuels division and steady earnings streams of its Ultracargo and Ultragaz subsidiaries. However, the strong rally of the shares year-to-date leaves limited upside, the analyst tells investors in a research note. In addition, the firm believes that Ipiranga’s margin recovery could be more gradual than the market prices in.