XP cuts Sanepar to neutral with R$ 45.80 price target

On 16 September 2026, XP Investimentos downgraded its recommendation on Sanepar from buy to neutral. At the same time, the broker raised its price target for the end of 2027 to R$ 45.80 per share.

Analysts Raul Cavendish, Bruno Vidal and Ana Clara Ribeiro stated that the lack of catalysts over the next 6 to 12 months reduces the stock's appeal compared with peers. The previous buy thesis relied on reasonable chances of privatisation and the retention of 25% of Sanepar's R$ 4 billion in tax credits to support high dividends in 2026 and 2027. XP now views that 25% tax credit retention as an optimistic scenario rather than its base case.

XP noted that privatisation is unlikely to progress in the near term. The state of Paraná holds a strong fiscal position, its economic stake in the utility is relatively modest at around R$ 2 billion, and the government is expanding sewage coverage through public-private partnerships. A positive public perception of Sanepar's service also lowers pressure for a sale.

XP calculates a real internal rate of return of 14.2% for Sanepar, compared with 11.4% for Sabesp and 14.4% for Copasa. Sanepar trades at an enterprise value to regulatory asset base ratio of 0.6 times, against XP's target multiple of 0.7 times.