Natura downgraded by JPMorgan amid operational concerns

JPMorgan has downgraded its recommendation for Natura (NATU3) from overweight to neutral, citing concerns regarding the company's execution, weakening operational performance, and reduced confidence in profit trajectories. The bank set a new price target of R$ 8.50 for December 2027, a significant reduction from its previous projection of R$ 11 for December 2026.

Despite the completion of Natura's simplification process, including the sale of Avon International outside Latin America, the bank noted that new operational concerns have emerged. Specifically, improvements in cash flow generation have not materialized as expected, and the company faces weak operational trends with Avon in Latin America. JPMorgan also reduced its 2027 net revenue estimate to R$ 22.7 billion and lowered its 2026 net profit forecast by 41%.

Concurrently, Natura's stock has entered an oversold region on the exchange, with the Relative Strength Index (RSI) falling to 25.59 points. The stock has seen a decline of 20.62% over the last 12 months. While technical indicators suggest a potential for a rebound, the prevailing trend remains negative, with key support levels identified between R$ 7.08 and R$ 6.88.