The duo also says that based on data from the ONS (National Electric System Operator), the load factor of CPFL's wind assets in the third quarter should be around 30% again. (Image: iStock/Nelson_A_Ishikawa)
O Bradesco BBI praised the CPFL (CPFE3). He rated the company as high quality, with solid governance, mostly impeccable operations and, best of all, generating cash flow/dividends attractive to investors seeking income.
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According to analysts Francisco Navarrete and Ricardo França, who signed the report, CPFL's distribution assets (around 60% of the value of net assets) face fewer relative challenges to meet the increasing quality requirements of regulators, due to high-quality engineering and location in the richest regions of Southeast/South Brazil.
The duo also says that based on data from the ONS (National Electric System Operator)the load factor of CPFL's wind assets in the third quarter should once again be around 30%.
“Regardless, with positive factors outweighing the results of underperforming renewable assets, CPFL has managed to continue paying relatively high dividends, which in our estimation should continue: for example, we see its yield in 2024/2025 at 9.4%/8.2%, respectively.”
But all this comes up against a problem: the price of paper.
Analysts estimate that the stock is trading at an IRR (internal rate of return) of 8%, a premium of 1.60 percentage points in relation to fixed income securities NTN-B, but 4.20 pp below the Energisa (ENGI11) (Neutral) and -2.40 pp for Equatorial (EQTL3) (Purchase).
“As always, premium assets and high dividends, but at fair prices. Thus, we maintain our neutral recommendation unchanged, while defining a new target price at the end of 2025 of R$38.50/share”, he says.