Smiles Advances as Bradesco, Santander Say Buy: Sao Paulo Mover

Smiles SA, the frequent-flier unit of Gol Linhas Aereas Inteligentes SA that went public in April, rose after three analysts recommended buying the stock.

The shares gained 1.8 percent to 25.45 reais at the close of trading in Sao Paulo, the highest level since May 27. The benchmark Brazilian Ibovespa gauge fell 2.3 percent.

Analysts at Deutsche Bank AG and Banco Santander Brasil SA initiated coverage of the stock with buy ratings, according to research reports dated today. Banco Bradesco SA’s brokerage unit also initiated coverage with the equivalent of a buy recommendation. Their target prices for the Sao Paulo-based company’s shares ranged from 33 reais to 38.50 reais, according to the reports.

“We view Smiles as an attractive alternative to gain exposure to several high-growth sectors in Brazil,” Deutsche Bank analysts including Mario Pierry wrote in a research note. The company “is a first-class loyalty program in terms of value proposition to clients, given its efficient pricing model and diversified product mix.”