Shares retreated 0.5 percent to 2,890 pesos at 10:59 a.m. in Santiago in its sixth day of declines, the longest stretch of losses since Nov. 30. The Ipsa benchmark index of stocks advanced 0.1 percent.
UBS cut its recommendation for Cencosud to sell from neutral and lowered its price target to 2,900 pesos from 3,170 pesos, according to in an e-mailed report to clients. The retailer trades at higher valuations than regional peers with better returns on invested capital and lower leverage, according to UBS.
“Cencosud is highly exposed to Argentinean currency risks and faces high execution risks in Brazil and Colombia,” UBS analyst Gustavo Piras Oliveira wrote in the note.
Cencosud trades at 21 times estimated earnings for the next 12 months and has a return over invested capital of 6.9 percent, compared with an average 11 percent for Latin America retailers, according to data compiled by Bloomberg.
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