Should you buy Ultrapar Participacoes S.A. (Ne (UGP)?
Updated
Ultrapar Participacoes offers an exceptional valuation with a PEG of 0.05 and forward P/E of 8.1x, strong earnings growth, and an asymmetry ratio of 2.43 with 16% upside, but weak momentum and falling on-balance volume indicate the market has not yet recognized this value.
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Engine methodology range
Range computation requires sufficient peer-comparable data; available for tickers with peer_count ≥3.
What the engine is tracking
| Pillar | Expectation | Trend |
|---|---|---|
Ultrapar trades at a PEG ratio of just 0.05 with a forward P/E of 8.1x and EV/EBITDA at the top decile of the scoring range, representing one of the most attractively valued names on a growth-adjusted basis. Valuation breakdown | The PEG-driven discount narrows as earnings growth of 10 out of 10 scoring is recognized by the market, with price rising at least 15% within 12 months toward the analyst target | →Stable |
| CounterUltrapar is a Brazilian energy company subject to currency risk, political risk, and commodity price exposure that can sustain deep valuation discounts for extended periods regardless of earnings growth | ||
Earnings growth scores at 10 out of 10 with consistent positive earnings surprises averaging 17% over the last four quarters, supported by revenue growth that is also scoring above average, indicating genuine fundamental improvement. Earnings | Earnings per share grows by at least 10% year-over-year over the next 12 months, sustaining the high growth score | →Stable |
| CounterRevenue growth confidence is only 0.67, and as a refining and marketing company Ultrapar's earnings are exposed to oil product margin compression that can rapidly reverse growth trends | ||
Despite strong fundamentals, the momentum score of 4.0 has failed the minimum threshold of 4.5, and on-balance volume is falling while RSI reads as oversold at 17, indicating that market participants are actively reducing exposure. Momentum breakdown | RSI recovers above 30 and OBV turns positive within 6 months, signaling demand absorption of the current selling pressure | →Stable |
| CounterAn RSI of 17 in an uptrend can represent a buying opportunity, and the technical score on support and resistance is a strong 9.4 out of 10, suggesting structural support is nearby | ||
Ultrapar trades at a PEG ratio of just 0.05 with a forward P/E of 8.1x and EV/EBITDA at the top decile of the scoring range, representing one of the most attractively valued names on a growth-adjusted basis.
→Stable- Expectation
- The PEG-driven discount narrows as earnings growth of 10 out of 10 scoring is recognized by the market, with price rising at least 15% within 12 months toward the analyst target
CounterUltrapar is a Brazilian energy company subject to currency risk, political risk, and commodity price exposure that can sustain deep valuation discounts for extended periods regardless of earnings growth
Earnings growth scores at 10 out of 10 with consistent positive earnings surprises averaging 17% over the last four quarters, supported by revenue growth that is also scoring above average, indicating genuine fundamental improvement.
→Stable- Expectation
- Earnings per share grows by at least 10% year-over-year over the next 12 months, sustaining the high growth score
CounterRevenue growth confidence is only 0.67, and as a refining and marketing company Ultrapar's earnings are exposed to oil product margin compression that can rapidly reverse growth trends
Despite strong fundamentals, the momentum score of 4.0 has failed the minimum threshold of 4.5, and on-balance volume is falling while RSI reads as oversold at 17, indicating that market participants are actively reducing exposure.
→Stable- Expectation
- RSI recovers above 30 and OBV turns positive within 6 months, signaling demand absorption of the current selling pressure
CounterAn RSI of 17 in an uptrend can represent a buying opportunity, and the technical score on support and resistance is a strong 9.4 out of 10, suggesting structural support is nearby
▸ Show 1 more pillar▾ Show fewer
With 16.1% upside to the analyst target of $5.54 and only 4.4% downside risk, the asymmetry ratio of 2.43 comfortably clears the required threshold, and analyst coverage of 8 firms provides a credible upside benchmark.
→Stable- Expectation
- Price reaches $5.54 or higher within 12 months as the valuation discount closes
CounterLight analyst coverage can mean targets are stale or consensus is thin, and the leverage penalty from a debt-to-equity ratio of 1.1 limits how much of the intrinsic value gain reaches equity holders
→ Full pillar scorecard with all 4 pillars + per-dimension breakdown
When this thesis breaks
Falsifiable conditions per pillar — any one trip warrants review independent of price action. Engine-derived; not personalized advice.
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Ultrapar trades at a PEG ratio of just 0.05 with a forward P/E of 8.1x and EV/EBITDA at the top decile of the scoring range, representing one of the most attractively valued names on a growth-adjusted basis.
Trip ifForward P/E multiple expands above 15x without corresponding earnings growth, signaling multiple expansion rather than value realization
- P2Earnings growth scores at 10 out of 10 with consistent positive earnings surprises averaging 17% over the last four quarters, supported by revenue growth that is also scoring above average, indicating genuine fundamental improvement.
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, breaking the earnings outperformance trend
- P3Despite strong fundamentals, the momentum score of 4.0 has failed the minimum threshold of 4.5, and on-balance volume is falling while RSI reads as oversold at 17, indicating that market participants are actively reducing exposure.
Trip ifOBV remains in a declining trend and RSI stays below 25 for more than 60 days
- P4With 16.1% upside to the analyst target of $5.54 and only 4.4% downside risk, the asymmetry ratio of 2.43 comfortably clears the required threshold, and analyst coverage of 8 firms provides a credible upside benchmark.
Trip ifPrice drops below $4.56 stop-loss level, more than 4% below current price, invalidating the support structure
How the engine reached this verdict
TrendMatrix's engine output for Ultrapar Participacoes S.A. (Ne (UGP) is HOLD_IF_HOLDING with medium conviction, score 6.5/10 at $4.88. None of the engine's positive-conviction paths (C-quality, D-momentum) cleared their gates — the F-path HOLD reflects balanced signals rather than directional conviction.
On the bull side: Attractive valuation; Strong growth profile; Margin of safety: 41%. On the bear side: Leverage penalty (D/E 1.1): -0.5.
The engine is not issuing fresh-money entry targets at the current verdict. The technical entry zone is around — with a technical stop near $4.60 for existing positions. Asymmetric R:R is 2.44, below the threshold (≥2.0) at which the engine would actively flag fresh capital. The engine's sizing output: 0.5% of portfolio at this asymmetry level (none-conviction tier).
Ultrapar Participacoes S.A. (Ne (UGP) sits at overall score 6.5/10 with no actively-failing gates (strongest-cleared: MOMENTUM:5.2>=4.5). HOLD flips toward BUY_WAIT when a positive-conviction path (C-quality or D-momentum) triggers; toward SELL when any of the currently-passing gates drop below threshold or three+ dimensions fall below 4 simultaneously.
For the full 10-dimension breakdown + V9 gate detail: Why TrendMatrix rates UGP — 10-dimension breakdown →
Bull case
- ▸Attractive valuation
- ▸Strong growth profile
- ▸Margin of safety: 41%
Bear case
- ▸Leverage penalty (D/E 1.1): -0.5