Taesa (TAEE11) XP cuts target price, but projects good dividends

03/18/2024 10:01

Updated on: 03/18/2024 10:19

XP reduced the price target for shares of Taesa (TAEE11), from R$38.00 to R$36.00. With a neutral recommendation for the electric energy company, the research estimates a potential appreciation of +1.9% for the company’s shares.

In its new report on the electricity sector, XP Research also made a projection of adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) TAEE11 leaner in the year, of R$1.957 million in 2024, a drop of 4% compared to R$2.043 million in 2023.

According to XP analysts, Maíra Maldonado and Vladimir Pinto (CFA), who signed the report, Taesa’s high quality is already priced in. The internal rate of return (IRR) is leveraged at around 5.9%, while other peers in the energy transmission sector are at 7.2%, which makes them more attractive.

“However, we believe that Taesa will be able to maintain dividend distribution levels”, say XP analysts.

Furthermore, analysts point out that the Taesa assets they follow more transparent regulations compared to older concessions, such as Isa Cteep (TRPL4).

It is further compared that:

• Taesa’s EBITDA margin is high, due to its operation of younger assets, in relation to its peers;
• The company has a pure transmission portfolio, compared to Alupar;
• It is strict about its application of costs.

XP sees good dividend opportunities in Taesa and other electric companies

Optimistic about maintaining payments dividends from Taesa, Analysts comment that it is possible that the company will have to reinforce its cash position to guarantee new investments and growth.

With a neutral rating for the three peers in the sector, XP prices Alupar (ALUP11) with an upside of 18.2%, with a target price of R$36.00 per share, Isa Cteep (TRPL4) at 6.1% and target price of R$26.00 per share and Taesa (TAEE11) at 1.9%, with R$36.00 per unit.

XP assesses that the sector must maintain fierce competitiveness, while there are many opportunities for expansion in the territory. These are mainly in the Northeast region, where new renewable energy capabilities are being developed.

“That said, we do not expect the companies covered in this report to be the main beneficiaries of this growth”, reinforce the analysts.

Taesa quote (TAEE11)

Last Friday (15), the shares of Taesa closed the market quoted at R$35.33, after a slight drop of 0.37%. During the week, shares accumulated a drop of 0.23%.