O Itaú BBA improved on Tuesday its projections for electrical eneva (ENEV3) to “outperform”, raising the target share price to 18.6 reais, against 15 reais, by stating that the company is the “best vehicle” to navigate a challenging water crisis.
The investment bank also said that, with energy volumes still uncontracted, Eneva should benefit from “extremely” high electricity prices in 2021/22.
Analysts Marcelo Sá and Luiza Candiota also stated that Eneva offers growth opportunities, with relatively low competition.
Eneva shares rose sharply on Tuesday, gaining 3.6% at the end of trading.
According to Itaú BBA, the cash generation measured by Eneva’s Ebitda should increase 57% in 2022, to 3 billion reais, also as the Azulão-Jaguatirica and Parnaíba V projects come into operation.
In the second quarter, Eneva’s profit increased by 38%, to 118.1 million reais, already boosted by an anticipation of dispatches from its thermal plants, which were called to produce earlier due to the drought that affects the country’s hydroelectric generation.
Eneva, which produces the gas consumed by the thermoelectric plants, has six energy generating units.
Of these, four are powered by natural gas, all located in the Maranhão, while two others are coal-fired, one in the state of Maranhão and the other in the Ceará.
Eneva has two other thermal plants under construction: Parnaíba V and Jaguatirica II – the latter in its final phase and should be ready in the last quarter of the year.
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