Cia. Paranaense de Energia, the largest electricity distributor in Brazil’s southern region, declined the most in more than two months after announcing a spending plan larger than estimated by some analysts.
Copel, as the company is known, declined 2.6 percent to 42.75 reais at the close of trading in Sao Paulo at 3 p.m. New York time. That’s the biggest drop since Sept. 24.
The utility said in a filing last night that it plans to invest 2.06 billion reais ($1.23 billion) in 2011, more than double the 900 million reais expected by Banco Santander SA. Part of the additional spending may be accounted for by delayed investments from this year, Marcio Prado, an analyst at Santander, wrote in a note to clients today.
“Copel released higher-than-expected capex guidance,” Prado wrote, while reiterating a recommendation to buy the shares. “We continue to be very positive on the name on the back of its appealing valuation.”
Copel trades at 9.9 times analysts’ 2011 earnings estimates, compared to a ratio of 10.8 for the Bovespa, data compiled by Bloomberg show. The utility advanced 19 percent this year through yesterday, while the Bovespa rose 1.4 percent.
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