UPDATE: Goldman Sachs Downgrades Telefonica Brasil Following Weaker-Than-Expected 3Q13 Results

In a report published Thursday, Goldman Sachs analyst Vera Rossi downgraded Telefonica Brasil VIV from a Buy rating to a Neutral Rating and lowered the price target from $26.00 to $21.00. In the report, Goldman Sachs says "We downgrade Telefonica Brasil (VIV) to Neutral from Buy given weaker-than-expected 3Q13 results. We believe pressure on margins will continue for the next few quarters, with higher expenses on moves to more value-added services in fixed and mobile businesses. Our 12-month target goes to US$21 from US$26 and our earnings per ADR (US$) for 2013/14/15E decrease to $1.33/1.42/1.45 from $1.52/1.60/1.70. On 2014E, VIV trades at 13.5x P/E and 9.5% FCF yield. Since being added to the Americas Buy List on 9/17, in US$ terms the ADRs of VIV were -11.2% vs. the Bovespa -6.4%. In R$ terms the shares of VIVT4.SA were -9.9% vs. the Bovespa -4.5%." Telefonica Brasil closed on Wednesday at $19.20.