Zacks Investment Research Lowers Companhia de Saneamento Basico (SBS) to Sell

Zacks Investment Research cut shares of Companhia de Saneamento Basico (NYSE:SBS) from a hold rating to a sell rating in a report published on Tuesday.

According to Zacks, “In the last three months, SABESP's American Depository Receipts (ADR) underperformed the industry. We believe that the company is exposed to risks arising from governmental interference and dependence on electricity as a source of energy. Moreover, the company's higher debt levels, if unchecked, will inflate its financial obligations, posing serious threats to its profitability. Also, any unwarranted rise in operating expenses as well as adverse impacts from currency translation will impact its margins and hence dent its profitability. In the third quarter 2017, the company's revenues were down 5.6% year over year due to 35.1% decline in construction revenues as a result of lower investments in municipalities served. The stock's earnings estimates for 2018 decreased in the last 60 days.”

SBS has been the subject of several other research reports. UBS Group lowered shares of Companhia de Saneamento Basico from a buy rating to a neutral rating in a research note on Thursday, November 2nd. HSBC upgraded shares of Companhia de Saneamento Basico from a hold rating to a buy rating in a research note on Wednesday, November 22nd. ValuEngine upgraded shares of Companhia de Saneamento Basico from a hold rating to a buy rating in a research note on Tuesday, November 14th. Scotiabank upgraded shares of Companhia de Saneamento Basico from an underperform rating to a sector perform rating in a research note on Monday, October 9th. Finally, JPMorgan Chase & Co. upgraded shares of Companhia de Saneamento Basico from a neutral rating to an overweight rating in a research note on Monday, November 27th. Two equities research analysts have rated the stock with a sell rating, four have assigned a hold rating and five have assigned a buy rating to the company. Companhia de Saneamento Basico currently has an average rating of Hold.

Shares of Companhia de Saneamento Basico (NYSE SBS) traded down $0.27 during mid-day trading on Tuesday, hitting $10.24. 1,676,500 shares of the stock traded hands, compared to its average volume of 1,174,667. The company has a debt-to-equity ratio of 0.61, a quick ratio of 1.07 and a current ratio of 1.10. Companhia de Saneamento Basico has a 12 month low of $8.15 and a 12 month high of $11.33. The stock has a market cap of $7,183.69, a price-to-earnings ratio of 7.88 and a beta of 1.85.

A number of large investors have recently made changes to their positions in the business. Windacre Partnership LLC boosted its holdings in Companhia de Saneamento Basico by 36.1% in the 3rd quarter. Windacre Partnership LLC now owns 12,509,300 shares of the utilities provider’s stock valued at $130,847,000 after purchasing an additional 3,321,300 shares during the period. Brookfield Asset Management Inc. boosted its holdings in Companhia de Saneamento Basico by 40.7% in the 2nd quarter. Brookfield Asset Management Inc. now owns 6,193,655 shares of the utilities provider’s stock valued at $58,964,000 after purchasing an additional 1,791,635 shares during the period. Vanguard Group Inc. boosted its holdings in Companhia de Saneamento Basico by 5.2% in the 2nd quarter. Vanguard Group Inc. now owns 5,172,179 shares of the utilities provider’s stock valued at $49,239,000 after purchasing an additional 256,552 shares during the period. Numeric Investors LLC boosted its holdings in Companhia de Saneamento Basico by 747.6% in the 2nd quarter. Numeric Investors LLC now owns 3,416,777 shares of the utilities provider’s stock valued at $32,528,000 after purchasing an additional 3,013,677 shares during the period. Finally, Nordea Investment Management AB boosted its holdings in Companhia de Saneamento Basico by 57.4% in the 2nd quarter. Nordea Investment Management AB now owns 3,005,216 shares of the utilities provider’s stock valued at $28,610,000 after purchasing an additional 1,095,638 shares during the period. 15.97% of the stock is owned by hedge funds and other institutional investors.

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About Companhia de Saneamento Basico

Companhia de Saneamento Basico do Estado de Sao Paulo-SABESP is a water and sewage service provider. The Company provides water and sewage services to a range of residential, commercial, industrial and governmental customers in over 360 municipalities in the state of Sao Paulo, including the city of Sao Paulo.

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