Companhia Energetica de Minas Gerais (NYSE:CIG) has been downgraded by Citigroup on January 16 which now rates the stock as Sell compared with Neutral rating suggested in the past. Analysts at Goldman, shed their positive views on January 03 by lowering it fromNeutral to Sell. The stock lost favor of UBS analysts who expressed their lack of confidence in it using a downgrade from Buy to Neutral on October 18.
CIG stock dropped -1.29% in recent trade and currently has a stock-market value of $5.7B. The shares finished at $3.82, after trading as low as $3.76 earlier in the session. It hit an intraday high Thursday at $3.8352. Trading activity significantly weakened as the volume at ready counter decreased to 2,598,271 shares versus 3,539,490 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 4,238,650 shares. The stock is now 148.05% above against its bear-market low of $1.54 on September 14, 2018. It has retreated -4.19% since it’s 52-week high of $3.98 reached in February. Now the market price is up 56.33% on the year and up 7.3% YTD.
Wall Street’s most bullish Companhia Energetica de Minas Gerais (NYSE:CIG) analysts are predicting the share price to blow past $4.61 per share during the next 12 months. The current median share price forecast by them is $4.04, suggesting that the stock could increase 5.76% in that time frame. The average price target of $3.92 calls for a nearly 2.62% increase in the stock price.
Companhia Energetica de Minas Gerais (CIG)’s 50 day simple moving average (SMA 50) price is $3.7 and its 200-day simple moving average (SMA 200) price is $2.68. The company’s stock currently has a total float of 1.16B shares. Its weekly volatility is hovering around 2.9% and felt 3.06% volatility in price over a month. On the upside, the share price will test short term resistance at around $3.85. On a downside, the stock is likely to find some support, which begins at $3.77. The failure to get near-term support could push it to $3.73.
When looking at valuations, Companhia Energetica de Minas Gerais (CIG) has a pricey P/E of 17.77x as compared to industry average of 13.29x. Moreover, it trades for 11.24 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 1.46x price/book and 0.96x price/sales. Compared to others, Companhia Energetica de Minas Gerais is in a different league with regards to profitability, having net margins of 4.8%. To put some perspective around this, the industry’s average net margin is 25.62%. CIG’s ROE is 7.5%, which is also considerably worse than the industry’s ROE of 16.29%. It’s also very liquid in the near term, with a current ratio of 1.2. The stock has a debt/capital of 1.04.
CIG last reported earnings that receded expectations. The company raked in $0.02 per share, -99.97% change on the same period last year. That was worse than consensus for $0.06. Revenue for the recent quarter stood at $1.53 billion, down -6% on last year and above the $1.49 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $6 billion to $6 billion, which should be compared with $6.82 billion generated last year.