In a report released today, Fernando Pompeo Do Amaral from Morgan Stanley maintained a Buy rating on Equatorial S.A. (EQTL3 – Research Report), with a price target of BRL40.00.
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Fernando Pompeo Do Amaral has given his Buy rating due to a combination of factors that highlight Equatorial S.A.’s potential for growth and profitability. Despite a miss in adjusted EBITDA compared to estimates, the company showed resilience with a consolidated net income that surpassed expectations, largely due to favorable financial results and equity income.
Moreover, the power generation segment demonstrated significant growth, with a notable increase in adjusted EBITDA driven by new solar assets and improved wind generation. The distribution segment also reported a year-over-year increase in adjusted EBITDA, supported by stable billed volumes and reduced energy losses. These positive developments, alongside a manageable net debt level, underpin the Buy rating as they suggest a strong foundation for future performance.