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Localiza Advances as Profit Exceeds Estimates: Sao Paulo Mover

Feb. 3 (Bloomberg) -- Localiza Rent a Car SA, Latin America’s largest car-rental company, rose to a five-month high after net income increased 13 percent in the fourth quarter.

Shares gained 3.7 percent to 29.80 reais at 12:26 p.m. in Sao Paulo, the highest intraday price since Sept. 1. The benchmark Bovespa index rose 1.2 percent.

Net income rose to 78.7 million reais ($45.7 million) in the fourth quarter, according to a regulatory filing yesterday. That compares with the median estimate of 73.7 million reais in a Bloomberg survey of six analysts. Net revenue increased 7 percent to 772.7 million reais, the company said.

“The stock is a core holding to play the pick-up in economic activity,” analysts Rodrigo Goes, Renato Mimica and Felipe Nussli from Banco BTG Pactual SA wrote in a note to clients today in which they reiterated a “buy” recommendation for the stock.

Brazil’s economy will grow 3.27 percent this year, according to a weekly central bank survey of about 100 economists published Jan. 30. Gross domestic product in the third quarter shrank for the first time since 2009, cementing expectations that growth last year slowed to 2.87 percent from 7.5 percent in 2010, according to a Jan. 9 bank survey.

New car sales rose 8.8 percent in January after falling 12.6 percent in December from a year earlier, according to data published by the country’s dealership association, known as Fenabrave.

To contact the reporter on this story: Katerina Petroff in Sao Paulo at kpetroff@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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