BUZZ-Brazilian retailer GPA falls on JPMorgan downgrade

Shares in Brazilian retailer GPA PCAR3.SA plunge as analysts at JPMorgan downgrade their recommendation on the stock to "Underweight" from "Neutral"

GPA shares drop around 6% in early Sao Paulo trading, making it the biggest faller on local benchmark stock index .BVSP, which is up 0.2%

The JPMorgan analysts also cut their price target for Assai shares to 8.50 reais from 10.00 reais previously

JPMorgan says that while profitability improvements are expected this year, GPA's cash generation and leverage remain a concern

"We see the situation even more challenging with higher rates," the analysts add, noting they don't see any sizable assets that could be readily sold to improve leverage significantly

Peer Assai ASAI3.SA falls more than 3% as the U.S. investment bank also says it is "cautious" on the Brazilian food retail sector overall