With an eye on developments in global markets, investors are concerned about demand for solar energy in 2023. The fear led to a correction in the shares of the Intelbras (INTB3), which accumulates losses of 14% in 2023 and received an “outperform” recommendation (expected performance above the market average) by Santander, with a target price of BRL 34.
For the bank, despite weaker volumes expected for 2023, the recent fall in the paper opens up an entry opportunity, as weaker demand for solar panels is already priced at current prices.
More than that, Santander believes that there is a good chance for an acceleration in demand throughout the year.
“We still expect the company to report year-on-year growth in the segment in the first quarter of 2023 and we project a nominal growth of around 20% (organic) for the year as a whole, just slightly below the company’s guidance”, says Felipe Cheng and Cesar Davanco, in a report published on Wednesday (15).
Santander is expecting to see an improvement as companies in the segment gradually adjust the focus of their sales towards solar energy projects, following the recent change in regulation.
“Additionally, we believe there is a good chance that prices of polysilicon (key component for solar panels) continue to fall, which could help to improve the return on solar energy projects”, he adds.
Santander cut the target price of the Intelbras share from R$ 40 to R$ 34. Even so, there is an attractive upside potential of 30% over the last closing, highlights the bank.
“At current prices, we see the stock trading at 14 times P/E (price to earnings), which looks attractive given our CAGR (compound annual growth rate) expectations for net income of approximately 22% over three years.” , comments.
As a potential increase for estimates, Santander does not rule out the possibility of Intelbras starting to work on conquering new initiatives, including sales linked to 5G equipment, EV chargers and others.
Source: Moneytimes
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