Cemig (CMIG4): Bradesco BBI raises recommendation, but sees the potential to fall into actions; understand

Bradesco BBI has revised its recommendation to CEMIG’s actions (CMIG4), raising it from “sale” to “neutral”. The decision reflects a more balanced scenario between risk and return in the company’s current valuation, as well as a dividend yield considered attractiveclose to 8% per year.

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Despite the change, the bank maintained the target price at $ 10 for the end of 2025, which It represents a fall potential compared to the current R $ 10.84.

Since the previous relegation, made in March, the company’s roles have accumulated up of about 8%, accompanying Ibovespa. However, performance was behind other companies in the industry, such as Copel and Sabesp.

According to analysts Francisco Navarrete and Ricardo França, the review of recommendation is based on three factors. First, the Valuation of the company now seems more reasonable, with an implicit internal rate of 10%implicit return, in line with the sector’s pairs.

In addition, the Dividend Yield designed between 2025 and 2028 supports the current price of stock, according to analysts.

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Finally, they say that the possibility of resuming the Privatization discussionseven if it is still remote, it can function as a positive trigger.

The Legislative Assembly of Minas Gerais should soon vote for Removal of the requirement of popular referendum for the privatization of state -owned companies such as Cemig, Copasa and Gasmig.

Although the sale of Cemig is considered unlikely, the eventual sale of Gasmig, the company’s full subsidiary, may unlock value for shareholders, according to Bradesco BBI.

For the bank, there are risks in Cemig’s display to the free energy market. The estimated impact for the second quarter of 2025 is R $ 80 million, the result of the difference between the spot prices of the Northeast and Southeast.