In a report released on March 25, Gustavo Faria from Bank of America Securities maintained a Buy rating on Companhia De Saneamento (SBS – Research Report), with a price target of $23.20.
Gustavo Faria’s rating is based on several positive developments within Companhia De Saneamento. The company reported strong fourth-quarter results, with adjusted EBITDA surpassing expectations due to effective cost-cutting measures. These initiatives led to a reduction in manageable expenses, which were notably lower than anticipated. Additionally, the company’s operational turnaround is progressing well, contributing to a favorable outlook.
Furthermore, Companhia De Saneamento is considered a top pick within the Brazilian Utilities sector, driven by its efficiency and organic growth prospects. The involvement of Equatorial as the new operator, known for its successful turnaround expertise, adds to the positive sentiment. The stock’s valuation remains attractive, and potential catalysts for re-rating in 2025, such as improvements in delinquency and liability management, as well as the upcoming tariff review process, further support the Buy rating.
SBS’s price has also changed slightly for the past six months – from $16.720 to $17.860, which is a 6.82% increase.