Itaú calculates dividends and says whether it’s time to buy shares – Money Times

O Itau BBA updated its expectations for broadcasters and reiterated the 'market perform' recommendation, that is, performance in line with the market, equivalent to neutral, for the Taesa (TAEE11), with a target price of R$37.5, previously at R$36.7.

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According to analysts, the stock trades at a premium to the Alupar (ALUP11) e ISA Cteep (TRPL4), that is, it is more expensive than its competitors. The IRR, the internal rate of return, of the electric company is at 7.6%, which, in Itaú's view, seems fair given its very low-risk business model.

And despite the high leverage expected for the coming years, especially in the short term (4.9x net debt/Ebitda in 2024-25), BBA does not see this as an obstacle, as it expects a rapid deleveraging post-2026.

In the case of dividends, the company's main attraction, BBA expects attractive returns in the medium to long term, with returns of 5.9% in 2024, 7.2% in 2025 and 8% in 2026.

“We do not recommend shorting the stock, given its attractive dividend yield, which is very important for retail investors,” he says.

ISA Cteep is a purchase for Itaú

In the same report, Itaú raised its recommendation for ISA Cteep from neutral to buy, with a target price of R$31.5, previously at R$26.5, which opens up potential for an increase of 28%.

On the stock exchange, the company is not having its best days. The stock has accumulated a 5.65% drop this year, amid pressure from the sale of the company's stake. Eletrobras (ELET3). However, in BBA's view, it is precisely this decline that makes the stock interesting.

Analysts point out that while ISA has fallen, returns are at 9.6% compared to other stocks in the segment, while they see the power company trading at an IRR (internal rate of return) of 9.6%, “an interesting upside potential given its low-risk business”.

Also according to the BBA, the estimates reflect:

• the final result of the last tariff redefinition for the renewed concession;
• a more optimistic outlook for brownfield investments (improvements in areas already in use);
• and a longer payment flow related to the economic component of the RBSE, which, in practice, is how much the company receives for the distribution and transmission of electricity.

BBA still sees the company paying high single-digit dividend yields in the short to medium term, potentially reaching 8.7% in 2024 (above peers), assuming a 75% payout.

Cteep shares are now the most liquid among broadcasters.