Centrais Eletricas Brasileiras SA - Eletrobras (EBR) AI Stock Analysis

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Centrais Eletricas Brasileiras SA - Eletrobras

(NYSE:EBR)

80Outperform

Eletrobras demonstrates a strong overall performance with solid financial health, attractive valuation, and positive sentiment from recent earnings calls. Despite challenges such as high debt levels and some project delays, the company's strategic initiatives and improved operational efficiency provide a favorable outlook. The technical analysis supports a bullish trend, though caution is advised due to potential short-term corrections.

Centrais Eletricas Brasileiras SA - Eletrobras (EBR) vs. S&P 500 (SPY)

Market Cap

$16.86B

Dividend Yield2.75%

Average Volume (3M)1.39M

Price to Earnings (P/E)8.5

Beta (1Y)0.54

Revenue Growth-0.26%

EPS Growth107.20%

CountryUS

Employees7,710

SectorUtilities

Sector Strength84

IndustryRegulated Electric

Share Statistics

EPS (TTM)0.83

Shares Outstanding2,021,139,400

10 Day Avg. Volume1,607,302

30 Day Avg. Volume1,391,054

Financial Highlights & Ratios

PEG Ratio0.08

Price to Book (P/B)N/A

Price to Sales (P/S)9.63

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$10.80

Price Target Upside46.14% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

Centrais Eletricas Brasileiras SA - Eletrobras Business Overview & Revenue Model

Company DescriptionCentrais Elétricas Brasileiras S.A. - Eletrobras, through its subsidiaries, engages in the generation, transmission, and distribution of electricity in Brazil. The company generates electricity through hydroelectric, thermal, nuclear, wind, and solar plants. As of December 31, 2021, it owned and operated 32 hydroelectric plants with a total installed capacity of 46,295.75 megawatts; nine thermal plants, including coal, and oil and gas power generation units with a total installed capacity of 1,505 megawatts; and two nuclear power plants comprising Angra I with an installed capacity of 640 megawatts and Angra II with an installed capacity of 1,350 megawatts. It also operates 66,556 kilometers of transmission lines. The company was incorporated in 1962 and is based in Rio de Janeiro, Brazil.

How the Company Makes MoneyEletrobras generates revenue through various streams, primarily by selling electricity produced from its power generation facilities. The company operates a mix of hydroelectric, thermoelectric, wind, and solar plants, which supply power to the national grid. Revenue is earned from long-term power purchase agreements (PPAs) and spot market sales. Additionally, Eletrobras earns income from its transmission business, which involves the construction, operation, and maintenance of transmission lines and substations, facilitating the distribution of electricity across Brazil. The company also benefits from partnerships and joint ventures with other energy firms, enhancing its operational capabilities and expanding its reach in the energy market.

Centrais Eletricas Brasileiras SA - Eletrobras Financial Statement Overview

Summary

Overall, Centrais Eletricas Brasileiras SA - Eletrobras exhibits a solid financial performance with strong profitability metrics and improved cash flow management. The company has demonstrated substantial growth in revenue and net income, coupled with efficient cost control. While the balance sheet is robust, there is room for improvement in managing total liabilities and ensuring consistent revenue growth. Continued focus on leveraging financial strengths and addressing potential risks in cash flow stability will be beneficial for sustained growth.

Income Statement

Very Positive

Centrais Eletricas Brasileiras SA - Eletrobras has shown strong revenue growth with a consistent upward trajectory from 2020 to 2024, highlighted by a significant increase in net income. The gross profit and EBIT margins are robust, reflecting efficient cost management. The net profit margin has improved significantly, indicating enhanced profitability. However, revenue growth has been inconsistent with fluctuations, showing a need for continued focus on stable revenue expansion.

Balance Sheet

Positive

The company maintains a solid equity base with a favorable equity ratio, indicating a strong financial position. The debt-to-equity ratio is moderate, reflecting balanced leverage. Return on equity has improved over recent years, showcasing efficient use of shareholder funds. Nonetheless, the high level of total liabilities suggests a need for careful management of obligations and leverage.

Cash Flow

Very Positive

Eletrobras has demonstrated strong free cash flow growth, supported by substantial operating cash flow. The operating cash flow to net income ratio shows effective cash generation from operations. The company has improved its free cash flow position significantly after previous challenges, highlighting better capital expenditure management. However, there has been notable volatility in cash flows in past years, indicating potential risks in cash flow stability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
40.18B	37.16B	34.07B	37.62B	29.08B
	Gross Profit
21.76B	18.49B	18.22B	25.66B	15.65B
	EBIT
17.66B	11.02B	5.69B	13.40B	6.94B
	EBITDA
16.53B	11.81B	9.07B	14.08B	11.33B
	Net Income Common Stockholders
10.38B	4.55B	2.65B	5.65B	6.39B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
29.83B	15.97B	23.62B	16.53B	14.33B
	Total Assets
289.87B	267.06B	270.22B	188.30B	178.97B
	Total Debt
78.24B	63.15B	61.15B	46.14B	49.10B
	Net Debt
51.67B	50.10B	49.72B	45.94B	48.82B
	Total Liabilities
167.87B	154.59B	159.19B	111.89B	105.22B
	Stockholders Equity
121.86B	112.33B	110.50B	76.12B	73.48B
Cash Flow		Free Cash Flow
9.29B	4.12B	-24.35B	-10.92B	1.80B
	Operating Cash Flow
12.39B	8.24B	9.28B	-8.23B	4.20B
	Investing Cash Flow
-8.66B	827.04M	-28.80B	123.99M	2.44B
	Financing Cash Flow
9.80B	-6.76B	30.07B	-8.45B	-6.69B

Centrais Eletricas Brasileiras SA - Eletrobras Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7.39

Price Trends

50DMA

6.88

Positive

100DMA

6.35

Positive

200DMA

6.58

Positive

Market Momentum

MACD

0.09

Negative

RSI

60.68

Neutral

STOCH

90.48

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EBR, the sentiment is Positive. The current price of 7.39 is above the 20-day moving average (MA) of 7.14, above the 50-day MA of 6.88, and above the 200-day MA of 6.58, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 60.68 is Neutral, neither overbought nor oversold. The STOCH value of 90.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EBR.

Centrais Eletricas Brasileiras SA - Eletrobras Risk Analysis

Centrais Eletricas Brasileiras SA - Eletrobras disclosed 61 risk factors in its most recent earnings report. Centrais Eletricas Brasileiras SA - Eletrobras 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 0 New Risks

Centrais Eletricas Brasileiras SA - Eletrobras Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EBR.B	81 Outperform	$16.86B	9.35	9.37%	8.03%	-0.26%	107.20%
EBR	80 Outperform	$16.86B	8.47	9.37%	2.75%	-0.26%	107.20%
CMS	78 Outperform	$21.57B	21.66	12.72%	2.90%	0.71%	11.07%
EVRG	72 Outperform	$15.40B	17.67	8.91%	3.91%	5.73%	19.34%
EIX	72 Outperform	$21.49B	16.85	8.83%	5.67%	7.72%	6.49%
LNT	71 Outperform	$15.23B	22.07	10.01%	3.28%	-1.12%	-3.22%
Sector *	62 Neutral	$8.60B	12.04	6.29%	4.50%	3.04%	-9.39%

* Utilities Sector Average

Performance Comparison

EBR

Centrais Eletricas Brasileiras SA - Eletrobras

7.39

0.33

4.67%

LNT

Alliant Energy

61.03

12.78

26.49%

EBR.B

Centrais Elc Braz Pfb B Elbras

8.00

0.32

4.17%

CMS

CMS Energy

73.70

15.60

26.85%

EIX

Edison International

57.82

-9.86

-14.57%

EVRG

Evergy

68.36

18.32

36.61%

Centrais Eletricas Brasileiras SA - Eletrobras Earnings Call Summary

Earnings Call Date: Mar 13, 2025 | % Change Since: 7.88% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

The earnings call indicated a positive transformation phase for Eletrobras post-privatization, with substantial achievements in liability reduction, dividend payouts, and customer growth. However, challenges remain, including project delays, high debt levels, and energy price volatility. Overall, the positive developments and strategic focus on growth and efficiency outweigh the challenges, reflecting a positive sentiment.

Highlights

Privatization Approved and Transformation Phase Initiated

The privatization of Eletrobras was approved, marking a new transformation phase for the company, emphasizing excellent performance, disciplined management, and client trust.

Significant Reduction in Liabilities

Eletrobras achieved a 50% reduction in compulsory loan provisions, starting from BRL26 billion and ending the year at BRL13.6 billion.

Record Dividend Payout

A record dividend payout of BRL4 billion was declared, attributed to enhanced management and financial performance.

Increase in Free Energy Customers

The company reached 700 free energy customers, facilitated by a centralized structure in the trading area and enhanced credit and market risk management.

Strong Investment in Energy Infrastructure

Eletrobras invested significantly in infrastructure projects, including the Coxilha Negra wind farm and Transnorte Energia, with a total investment of BRL14 billion in new projects.

Growth in Operating Performance

Operational costs reduced to BRL6.784 billion, with a trend toward further reduction, and a hiring of 2,100 new employees in a restructuring process.

Lowlights

Delayed Wind Farm Project

The Boa Vista wind farm project faced over a decade of delay, with expected delivery in the second half of 2025.

High Gross Debt Levels

Gross debt was reported at BRL75.6 billion, representing four years of funding, with plans to lengthen debt maturity.

Volatility in Energy Prices

Energy market faced significant volatility, with price fluctuations due to intermittent renewables and varying reservoir levels.

Operational Challenges

The company is dealing with complex balance issues, including the necessity to clean up and optimize financial assets.

Company Guidance

In the Eletrobras conference call discussing the results for the fourth quarter of 2024, CEO Ivan de Souza Monteiro outlined several key metrics and strategic initiatives. The company reported a reduction in operational costs, with PMSO costs decreasing consistently, reaching BRL6.784 billion in 2024, and a trend for further reduction with 7,700 employees, after hiring 2,100 new professionals. Eletrobras also announced a significant decrease in liabilities, reducing the provision for compulsory loan inventory by 50% since privatization, from BRL26 billion to BRL13.6 billion. Investment in energy generation and transmission was highlighted, with a focus on growth through auctions, resulting in a CapEx of BRL5.6 billion and an annual revenue of BRL6.4 billion. The company emphasized its commitment to ESG goals, with investments in green hydrogen and battery hybrid systems. Financially, Eletrobras achieved BRL32 billion in investments and declared BRL4 billion in dividends, supported by a gross debt of BRL75.6 billion. The call also touched on the company's strategic focus on innovation and technology, aiming to enhance operational efficiency and resilience, while actively managing the energy trading portfolio amidst market volatility.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.