Back to top

Analyst Blog

We recently downgraded Cosan Limited (CZZ - Analyst Report) from Neutral to an Underperform recommendation.

Why the Downgrade?

Cosan is one of the leading sugar and ethanol producers in Brazil and is also well recognized worldwide. Apart from its core businesses, the company is also engaged in energy, food, logistics, infrastructure, and farmland development and management businesses.

It seems that things are not going too much in favor of Cosan, and being wary of the present scenario we have now taken a bearish stance on it. If we steal a look into the last reported fiscal quarter results, we find that costs have been increasing for the company over time. A hike of 29% in the cost of sales and services and roughly 51% in selling, general and administrative expenses were registered in the quarter.

Apart from costs, long-term debt is also rising and it more than doubled in the third quarter 2013. Further increases in costs and debts are likely to weaken margins and put pressure on the financials of the company.

To add to the peril, Cosan faces risks from adverse weather conditions that had impacted production and crushing activities badly in the past few quarters. Also, geopolitical and FX variation risks arising from the company’s presence in international markets as well as increasing competitiveness in the industry are major impediments to growth.

Other Stocks to Consider

Cosan currently has a market capitalization of $5.2 billion. Other players that are worth a mention in the industry are Monsanto Company (MON - Analyst Report), Hillshire Brands Company (HSH - Snapshot Report) and The Andersons, Inc. (ANDE - Analyst Report), each holding a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
STRATTEC SE… STRT 80.24 +3.00%
PATTERSON-U… PTEN 34.54 +2.98%