Brazil's Duratex Gains as Itau Sees Profit Rising on Demand for Products
Duratex SA, the Brazilian producer of wood panels and bathroom fixtures, gained the most in a week in Sao Paulo trading after Itau Unibanco Holding SA said earnings would benefit from accelerating demand for its products.
Shares jumped 2.3 percent to 15.67 reais at 11:22 a.m. New York time. Earlier they gained 2.9 percent, the biggest increase since April 29.
“Duratex’s results this year will likely reflect the positive outlook for the furniture and real estate industries,” Itau analysts Renata Faber and Fernando Abdalla wrote in a note to clients. “At the same time that demand is very strong, we don’t see much pressure on costs. The company’s installed- capacity utilization is likely to increase and margins will likely recover.”
The company is “well positioned” to take advantage of increasing growth in the wood-panels market after taking over Satipel Industrial SA last year, the analysts said. Itau has an “outperform” rating on the stock.
Duratex has dropped 3.3 percent so far this year, compared to a decline of 5.6 percent for the benchmark Bovespa index.
To contact the reporter on this story: Alexander Cuadros in Sao Paulo at email@example.com