English 
Spanish 
3 min read
WEG shares on the rise after positive results and possible partnership with SpaceX
WEG shares have been on an upward trajectory since the release of its results for the second quarter of 2023. Since then, shares have not stopped rising, reaching an accumulated gain of 18,15% from the 18th of July until the close of this Monday (24th). According to InfoMoney, the shares turned to the positive in the year, recording accumulated gains of 9,19%. This performance, in addition to the disclosure of the partnership with SpaceX, made WEG's shares stand out as leaders in earnings on the Ibovespa.
The excellent results of WEG shares surpassed the already optimistic projections. The positive highlight was the revenue in the external market, which grew 25% in one year, with significant increases in North America (21%) and Europe (48%).
The good performance of shares in the external market was driven by solid demand for short-cycle industrial electrical and electronic equipment, especially in North America, and by Transmission and Distribution (T&D) projects in that region, with sales of transformers for wind farms and solar. Furthermore, WEG achieved a amazing profitability, thanks to lower input prices, favorable mix and productivity improvements.
- Traditional banks' days are numbered: Banco do Brasil, Bradesco and Itaú are losing ground to digital banks such as Nubank, Inter and C6 Bank
- Forget Petrobras! The 'Embraer of space', Brazil's new state-owned company, has the potential to generate more than 17 BILLION, says the first Brazilian astronaut to set foot in space
- Government announces MILLION-DOLLAR investment in highways in the Sertão to benefit 140 THOUSAND people
- Triumphant return of the railways! São Paulo will have a train that leaves the capital for the city in the interior of São Paulo to accommodate 50 THOUSAND passengers per day
Revisions of projections and upside potential
In response to the solid results, several houses revised their projections for WEG upwards. Bradesco BBI, even with a neutral recommendation, raised the target price by 3%, from BRL 38 to BRL 39, representing a value 6% lower compared to Monday's close.
JPMorgan, on the other hand, with an overweight recommendation (above the market average), increased the target price from BRL 47 to BRL 50, reflecting a potential appreciation of 20% compared to Monday's close. JPMorgan highlights the WEG's ability to exceed expectations, the positive outlook for the T&D market in North America and the historical valuation discount as factors supporting the recommendation.
Possible partnership with SpaceX boosts stocks
According to Jovem Pan (24/07), the Brazilian WEG, the largest manufacturer of electric motors in the world, was supposedly chosen by billionaire Elon Musk to supply engines to SpaceX. This is because the propulsion engines of the aerospace company's rockets consume a large amount of oxygen. Thus, SpaceX would work on creating a gas self-production unit to avoid purchasing the product.
SpaceX would use WEG engines in oxygen production platforms on the high seas, coupled to compressors used in air separation mechanisms, which are one of the fundamental components of rockets. According to Jovem Pan, the decision to choose WEG was based on the quality of the engines and the company's agility in customizing a product line in record time.
However, one source reveals that what led to this interpretation was a note made by WEG itself on July 10, mentioning the supply of engines for the SpaceX project with Atlas Copco. Despite the alteration of the note without the name of the companies involved due to confidentiality agreements, the news of the possible partnership between WEG and SpaceX gained strength, boosting the shares.
