Hypermarcas SA, the Brazilian maker of consumer products including diapers and generic drugs, rose to a five-week high as JPMorgan Chase & Co. recommended the stock, citing the potential for improved revenue.
The shares advanced 3.1 percent to 16.40 reais at the close of trading in Sao Paulo, the highest level since June 10. The benchmark Ibovespa added 0.5 percent.
JPMorgan expects Hypermarcas’s sales to “remain resilient despite the slowdown in the macroeconomic environment” because its products are inexpensive and the company has improved its sales team, according to a note to clients today. The company manufactures more than 190 consumer products.
“Hypermarcas will likely prove to be a defensive stock in a challenging second half of 2013,” Andrea Teixeira, Joseph Giordano and Pedro Leduc, analysts at JPMorgan, wrote in the research report. They raised their rating to buy from the equivalent of hold.
The JPMorgan analysts projected that Hypermarcas’s revenue will increase 9.7 percent to 4.3 billion reais ($1.9 billion) this year from 2012. The Sao Paulo-based company’s average price for pharmaceutical items is about 10 reais and for personal-care products, 8 reais, according to the report.
Analysts covering the Brazilian economy cut their estimates for the country’s gross domestic product growth in 2013 to 2.31 percent from 2.34 percent, according to a weekly survey from the central bank published July 15.