Goldman Sachs Initiates Endesa Americas At Neutral, $13 Target

Goldman Sachs initiated coverage on Endesa Americas SA – ADR EOCA with a Neutral Rating and $13 price target, which implies an estimated total return of 7 percent compared to 12.4 percent for the bank's Chilean utilities coverage.

According to the report published Monday, the next step in current restructuring process includes (1) the vote at the Extraordinary Shareholder Meeting that will take place before the second quarter of 2016, concerning a merger of Endesa Americas into Enersis Americas, (2) the exercise of withdrawal rights by minority shareholders not accepting the transaction terms and (3) the conclusion of the merger in the third quarter of this year.

Related Link: Endesa Chile And Endesa Américas Announce Distribution of Shares of Endesa Américas

In addition to the restructuring process, the analysts see the July 27 action to re-contract electricity in the regulated market for generators, potential La Niña effects on rainfall, quarterly results with the full impact of the distribution tariffs increase in Argentina (Edesur) and the full tariff revisions for power distributors Codensa (October 2016) and Edelnor (October 2017) as potential catalysts for the upcoming 12 months.

At time of writing, Endesa Americas was up 3.96 percent on the day, trading at $13.39.