Bradesco BBI raises Alupar target to R$ 40

Bradesco BBI raised its price target for Alupar from R$ 32 to R$ 40 per unit. The bank maintained its neutral rating on the Brazilian electricity transmission company.

The adjustment reflects updated estimates through the end of 2027 across the power transmission sector. Bradesco BBI also raised its price targets for ISA Energia from R$ 33 to R$ 34 with a neutral rating, and for Taesa from R$ 38 to R$ 40 with a sell rating.

According to the bank's analysts, power transmission assets offer predictable cash flow due to contracted, regulated revenues with lower exposure to economic activity. However, shares of all three companies have underperformed both the Ibovespa index and the broader electricity sector index year to date, driven by tighter valuations and investor rotation toward domestic cyclical names.

While ISA Energia and Taesa stand out for recurring dividends, Bradesco BBI noted that Alupar draws attention for its exposure to projects under implementation and future growth potential. The bank cautioned that a high dividend yield does not guarantee superior total returns, as its ratings also weigh internal rates of return, capital expenditure schedules, leverage, and price-to-fair-value relationships.