UPDATE: Citigroup Downgrades Endesa Chile to Neutral
Citigroup lowered its rating on Endesa Chile (NYSE: EOC) from Buy to Neutral and reduced its price target from $63.50 to $53.50 on challenging Chile conditions.
Citigroup noted, "In spite of a set of better-than-expected results, we think the announced US$8bn capital increase at Enersis will give rise to concerns about dilution risk for minority shareholders at Endesa Chile. Strong underlying results in Colombia and Perú continued to compensate for challenging conditions in Chile. We continue to see positive momentum moving into 2H12 on a brighter outlook for hydrology in Chile (especially given the increased likelihood of El Niño conditions) and the commissioning of Bocamina 2 in 2H12. We expect a negative read-across from the capital increase announcement at Enersis."
Endesa Chile closed at $51.91 on Wednesday.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.