Morgan Stanley sees only two sectors on the stock exchange with returns above the cost of capital and bets on exporters
According to InfoMoney, less than 30% of covered companies are expected to have ROE above the cost of capital in 2027, which reaches 20.1% in local currency.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM INFOMONEY · 3 MIN
Only two sectors of the Brazilian Stock Exchange are expected to deliver a return on equity above the cost of capital in 2027, according to a Morgan Stanley report released on Friday and reported by InfoMoney. They are finance and oil and gas. For the bank, the situation is unfavorable for the majority of the market, and the bet falls on exporters.
The diagnosis compares ROE, which measures the return that the company obtains on shareholder capital, with the cost of capital required by the investor. According to InfoMoney, less than 30% of the companies covered by the report are expected to have an ROE higher than this cost in 2027. The median ROE projected for Brazilian companies in the same year is 17.3%, below the cost of capital.
The cost of capital in local currency appears at 20.1%, a level close to the most stressed moments of 2025. The report attributes this increase to Lula's re-election and the continuity of economic policies. The Morgan Stanley strategists responsible for the analysis are Nikolaj Lippmann, Julia Nogueira and Marcos Rios.
What is at stake is the ability of companies to generate value for shareholders in an environment where money is expensive. When the projected return is below the rate required by the market, the investment no longer remunerates capital to the expected extent, and investors tend to be more selective.
The preference for exporters is the counterpoint to this more restrictive reading on the rest of the Stock Exchange. The report does not detail all the criteria used by the bank for this choice, so the reader should treat the thesis as the vision of an analysis house, and not as a market consensus.
What changes for the investor
If the diagnosis is confirmed, the concentration of returns in a few sectors tends to gain weight in stock selection, with greater attention paid to companies capable of overcoming a high cost of capital. For those who invest in the stock market, it is worth monitoring how this required rate behaves, because it influences how much the market is willing to pay for the companies' future profits. This article does not provide a purchase or sale recommendation or price projections.
Automatically translated from Portuguese.
