tiprankstipranks
Trending News
More News >
Companhia Energetica Minas Gerais (CIG)
NYSE:CIG
Advertisement

Companhia Energetica Minas Gerais (CIG) AI Stock Analysis

Compare
535 Followers

Top Page

CIG

Companhia Energetica Minas Gerais

(NYSE:CIG)

Select Model
Select Model
Select Model
Outperform 79 (OpenAI - 4o)
Rating:79Outperform
Price Target:
$2.00
▼(-6.10% Downside)
Companhia Energetica Minas Gerais has a strong overall stock score driven by its attractive valuation and positive technical indicators. The company's financial performance is solid, though there are concerns about declining EBITDA margins and cash flow. The recent earnings call provided a positive outlook with strategic investments, despite some regulatory challenges.
Positive Factors
Investment in Infrastructure
Significant infrastructure investments indicate a strong commitment to growth and sustainability, enhancing long-term operational capacity and reliability.
EBITDA Growth
The increase in EBITDA reflects improved operational efficiency and profitability, supporting future financial stability and investment capacity.
Concession Extensions
Securing concession extensions ensures long-term operational stability and revenue generation, reinforcing Cemig's market position in the energy sector.
Negative Factors
Declining EBITDA Margins
Decreasing EBITDA margins can indicate rising operational costs or inefficiencies, potentially impacting profitability and financial flexibility.
Reduced Free Cash Flow
A significant drop in free cash flow limits the company's ability to fund new investments, pay down debt, or return capital to shareholders, affecting long-term growth.
Energy Market Reduction
A reduction in market share due to client migration can weaken revenue streams and competitive positioning, challenging future growth prospects.

Companhia Energetica Minas Gerais (CIG) vs. SPDR S&P 500 ETF (SPY)

Companhia Energetica Minas Gerais Business Overview & Revenue Model

Company DescriptionCompanhia Energética de Minas Gerais, through its subsidiaries, engages in the generation, transmission, distribution, and sale of energy in Brazil. As of December 31, 2021, the company operated 70 hydroelectric, wind, and solar plants with an installed capacity of 5,700 MW; 339,086 miles of distribution lines; and 4,449 miles of transmission lines. It is also involved in the acquisition, transportation, and distribution of gas and its sub products and derivatives; provision of cloud solution, IT infrastructure, IT management, and cybersecurity services; provision of technology systems and systems for operational management of public service concessions; sale and trading of energy; provision of telecommunications services; and distributed generation, account services, cogeneration, energy efficiency, and supply and storage management activities. The company was incorporated in 1952 and is headquartered in Belo Horizonte, Brazil.
How the Company Makes MoneyCIG generates revenue primarily through the sale of electricity to end-users, including residential, commercial, and industrial customers. The company's core revenue streams include electricity generation from its diverse power plants, which harness both renewable and non-renewable resources. Additionally, CIG earns income from the transmission and distribution of electricity across its operational regions. The company may also benefit from regulatory frameworks and agreements that allow for adjustments in tariff rates, enabling it to optimize its pricing strategy. Partnerships with governmental and private entities for energy projects and infrastructure development further contribute to its financial performance.

Companhia Energetica Minas Gerais Earnings Call Summary

Earnings Call Date:Aug 14, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 12, 2025
Earnings Call Sentiment Positive
The earnings call highlights significant investments and growth in adjusted EBITDA, alongside successful strategic initiatives like the GSF auction participation. However, challenges in the trading sector and noncash impacts from regulatory adjustments present some headwinds.
Q2-2025 Updates
Positive Updates
Record Investment Program
Cemig is executing its largest investment program to date, with BRL 2.7 billion invested in the first half of 2025, focusing on the expansion and maintenance of infrastructure.
Adjusted EBITDA Growth
Adjusted EBITDA for the quarter reached BRL 2.2 billion, showing a robust performance and a 15% increase in recurring EBITDA compared to last year.
Successful GSF Auction Participation
Cemig secured concession extensions for three power plants in the GSF auction, adding years to their operational timeline and ensuring future sustainability.
Leverage and Debt Management
Net debt over adjusted EBITDA stands at 1.59, with a comfortable leverage position supporting the ongoing investment plan.
Positive Performance in Gasmig
Gasmig's EBITDA aligns with expectations, and net profit has increased significantly due to efficient cost management.
Negative Updates
Negative Impact from Energy Submarkets
The trading sector experienced a negative impact of BRL 76 million due to differences among energy submarkets.
Noncash Impact from RBSE Adjustments
A noncash impact of BRL 199 million was recorded due to changes in the existing system basic grid calculation methodology.
Reduction in Cemig D Energy Market
A 3.3% drop in the energy market for Cemig D was noted, mainly due to client migration to the free market.
Company Guidance
During Cemig's Second Quarter 2025 earnings call, CEO Reynaldo Passanezi Filho highlighted several key metrics reflecting the company's robust performance. Cemig reported investments totaling BRL 2.7 billion in the first half of 2025, with an adjusted EBITDA of BRL 2.2 billion, demonstrating sound operational resilience. The company faced a noncash impact of BRL 199 million related to the RBSE review and a negative BRL 76 million from energy submarket differences, which they expect to neutralize. Cemig also achieved a tariff adjustment of 7.78% and secured the extension of concessions for three power plants through a BRL 200 million GSF auction. Additionally, Cemig's CFO Andrea Marques de Almeida discussed the successful execution of their BRL 2.8 billion annual investment plan, notably energizing nine substations and expanding low and medium voltage networks by over 2,600 kilometers. The company's leverage indicator stood at 1.59, supported by a cash flow ending at BRL 3 billion, underpinned by operational cash generation and debenture issuances. These strategic efforts underscore Cemig's commitment to future growth and sustainability in the energy sector.

Companhia Energetica Minas Gerais Financial Statement Overview

Summary
Companhia Energetica Minas Gerais demonstrates solid revenue growth and profitability, with a strong net profit margin and a balanced debt-to-equity position. However, there are concerns regarding declining EBITDA margins and reduced free cash flow, which could impact future financial flexibility.
Income Statement
80
Positive
The company has shown a consistent growth in revenue over the years, with a TTM (Trailing-Twelve-Months) revenue of 39.89 billion compared to 39.82 billion in the previous annual period. Gross Profit Margin has decreased to 7.20% in the TTM from 7.90% in the last annual report, while the Net Profit Margin slightly improved to 17.56% in the TTM, indicating effective cost management. However, the EBIT and EBITDA margins have declined, suggesting potential challenges in operational efficiency.
Balance Sheet
75
Positive
The company's debt-to-equity ratio is healthy at 0.56, reflecting a balanced approach to leveraging debt. The Return on Equity (ROE) for the TTM stands at 25.09%, showcasing strong profitability relative to equity. The equity ratio is at 43.67%, indicating a solid equity base. Despite these strengths, a slight increase in total liabilities suggests increased leverage, which could pose future risks.
Cash Flow
70
Positive
Free Cash Flow has decreased significantly in the TTM to 1.67 billion from 4.58 billion in the previous annual period, indicating reduced cash generation capacity. The Operating Cash Flow to Net Income ratio is robust at 1.16, demonstrating good cash conversion efficiency. However, the Free Cash Flow to Net Income ratio dropped to 0.24, raising concerns about the sustainability of cash flow generation.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue40.92B39.82B36.85B34.46B33.65B25.23B
Gross Profit7.96B7.83B8.38B6.81B6.72B5.38B
EBITDA11.47B11.74B9.15B6.24B6.92B6.20B
Net Income7.00B7.12B5.76B4.09B3.75B2.86B
Balance Sheet
Total Assets63.90B59.73B55.00B53.67B52.05B54.08B
Cash, Cash Equivalents and Short-Term Investments6.03B3.45B3.13B4.24B4.05B5.30B
Total Debt15.66B12.71B10.26B10.94B11.61B15.25B
Total Liabilities35.98B32.34B30.34B31.89B32.58B36.60B
Stockholders Equity27.91B27.38B24.65B21.78B19.46B17.47B
Cash Flow
Free Cash Flow1.67B4.58B5.38B6.32B3.45B8.43B
Operating Cash Flow5.23B5.50B6.64B6.61B3.69B8.61B
Investing Cash Flow-2.65B-2.38B-3.97B-3.21B1.37B-5.08B
Financing Cash Flow-1.51B-2.76B-2.58B-2.79B-5.91B-2.39B

Companhia Energetica Minas Gerais Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2.13
Price Trends
50DMA
1.95
Positive
100DMA
1.90
Positive
200DMA
1.79
Positive
Market Momentum
MACD
0.04
Negative
RSI
65.97
Neutral
STOCH
61.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIG, the sentiment is Positive. The current price of 2.13 is above the 20-day moving average (MA) of 2.05, above the 50-day MA of 1.95, and above the 200-day MA of 1.79, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 65.97 is Neutral, neither overbought nor oversold. The STOCH value of 61.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CIG.

Companhia Energetica Minas Gerais Risk Analysis

Companhia Energetica Minas Gerais disclosed 60 risk factors in its most recent earnings report. Companhia Energetica Minas Gerais reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
A member of our board of directors is party to judicial proceedings. Q4, 2022
2.
Increases in energy generated by MMGD in Cemig D's concession area could cause an imbalance in its cash flows and financial results. Q4, 2022
3.
The continuing impact of the ongoing military conflict between Russia and Ukraine, or any widening of the conflict, may have a material adverse effect on the global economy, certain material and commodity prices and potentially on our business. Q4, 2022

Companhia Energetica Minas Gerais Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$6.71B5.1522.94%14.85%-3.27%-3.44%
76
Outperform
7.01B12.7211.89%6.05%-5.28%14.50%
72
Outperform
7.01B13.7711.89%5.72%-5.28%14.50%
71
Outperform
56.95B20.848.56%2.90%0.46%-11.77%
64
Neutral
20.35B1,625.264.04%5.43%8.86%
58
Neutral
9.51B9.2846.27%5.24%-3.19%30.48%
66
Neutral
$17.65B18.105.60%3.62%6.62%11.55%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CIG
Companhia Energetica Minas Gerais
2.13
0.25
13.30%
BIP
Brookfield Infrastructure
31.19
-2.06
-6.20%
ELP
Companhia Paranaense de Energia Pfd
9.76
2.65
37.27%
SRE
Sempra Energy
87.28
7.33
9.17%
AES
AES
13.36
-5.18
-27.94%
ELPC
Companhia Paranaense de Energia Sponsored ADR
8.65
2.36
37.52%

Companhia Energetica Minas Gerais Corporate Events

CEMIG Faces Legal Challenges Over Power Plant Auction and Pension Plan
Jul 30, 2025

In May 2025, CEMIG announced that an injunction was granted to suspend the auction of four small-scale power plants, which are not part of the company’s strategic plan. The decision affects the auction held in December 2024, and CEMIG plans to appeal the ruling. Additionally, an injunction was granted in a lawsuit filed by Forluz regarding a deficit in the Supplementary Pension Plan, requiring a judicial deposit of over R$912 million. CEMIG is committed to keeping stakeholders informed of any developments.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 19, 2025