Afya: UBS Upgrades to Buy from Neutral, PT Down to $19 from $19.5

Afya: UBS Upgrades to Buy from Neutral, PT Down to $19 from $19.5

UBS Group has upgraded Afya Ltd. (NASDAQ: AFYA) to "Buy" from "Neutral," lowering its price target to $19.00 from $19.50. The move follows the company's strong financial performance and solid earnings reports. Afya, a Brazilian education company, operates in a market with a $1.37 billion market capitalization.

The upgrade reflects Afya's consistent performance record, as the company has consistently met its guidance since its initial public offering in 2019. In the second quarter of 2025, Afya reported earnings per share (EPS) of $2.27, surpassing expectations by 14.65%. However, revenue fell short of projections at $919.4 million compared to the anticipated $935.49 million.

UBS highlighted Afya's impressive gross margins of ~65% and 15.6% revenue growth over the last twelve months. The company's stock experienced a modest increase despite the revenue shortfall, underscoring its financial resilience. Despite the stock's relatively low trading liquidity of approximately $2 million per day, UBS believes Afya presents an interesting risk/reward combo for investors who can manage the limited liquidity.

The new price target of $19.00 is based on a December 2026 outlook, compared to the previous December 2025 target of $19.50, offering a potential upside of 3.1% in dollar terms or 3.6% in Brazilian reais.

References:
[1] https://www.investing.com/news/analyst-ratings/jpmorgan-upgrades-afya-stock-rating-to-overweight-on-solid-performance-93CH-4228189