Ultrapar Participacoes S.A. (New) American Depositary Shares (Each representing one Common Share) (UGP) fair value

ACCE thesis

Ultrapar is a Brazilian holding company whose core businesses are Ipiranga, the country's largest fuel distributor by retail network, and Ultragaz, the leading LPG distributor, with the Ultracargo logistics arm running terminals and storage. Its moat rests on that retail and logistics footprint: a large branded station network and distribution infrastructure that independent competitors struggle to replicate, which supports volumes even as Brazilian fuel demand swings. The equity looks inexpensive on the numbers provided, at 12.3x trailing and 9.2x forward earnings, while revenue grew 21.9% and ROE reached 19.8%. The thin 8.4% gross and 7.6% operating margins are the central tension, since the investment case depends on whether volume growth and logistics earnings can keep translating into profit at this margin level. For a concentrated book, the question to answer first is whether the forward multiple holds up under a margin squeeze in fuel distribution.