“Buy CBD and get Nova.com for free,” suggests legendary Brazilian retail analyst Daniela Bretthauer at Raymond James.
According to her, Nova.com has been growing faster than Brazil’s overall e-commerce market, due mainly to its “strong brands and execution and competitive prices.”
“At the end of 2011, Nova.com should be only 30% smaller than B2W, Brazil’s largest e-commerce player,” she adds.
As a result, she now believes that Nova.com will exceed B2W’s sales by 2014.
Raymond James is now reinstating their “outperform” recommendation on CBD with a target price of $49, for potential upside of roughly 25%. They find attractive that the stock trades at an estimated 2012 P/E and EV/EBITDA of 16.5x and 7.4x, respectively.
One note: the analysts are now revising their estimates for CBD following 3Q11 results and believe the 4Q is seasonally the strongest for the company.