March 13 (Bloomberg) -- Cia. Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, rose to a record high as JPMorgan Chase & Co. recommended buying the stock, citing expansion of small neighborhood stores.
Shares increased 2.9 percent to 106.82 reais at the close of trading in Sao Paulo, the highest since the stock started trading in October 1995. The benchmark Bovespa index fell 1.4 percent.
JPMorgan raised its recommendation on the stock to the equivalent of buy from hold as Pao de Acucar accelerated the expansion of its high-return neighborhood minimarkets, increased margins on its electronics unit and enhanced corporate governance by appointing new board members.
Those changes signal the beginning of a “virtuous cycle” and will help sales grow 11 percent this year, Andrea Teixeira and Pedro Leduc, analysts at JPMorgan, wrote in a research note to clients today.
Pao de Acucar advanced 15 percent this year through yesterday while the Bovespa slid 4.5 percent during the same period.
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