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Comgas Drops to One-Month Low as Itau Says Sell on Valuation

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Jan. 23 (Bloomberg) -- Cia. de Gas de Sao Paulo, Brazil’s only publicly traded gas distributor, fell to a one-month low as the investment bank Itau BBA cut its stock to the equivalent of sell because of its valuation.

Shares of Comgas, as the distributor is known, retreated 1.4 percent to 57.70 reais at the close of trading in Sao Paulo, the lowest level since Dec. 20. The shares have advanced 36 percent over the past 12 months, while the benchmark Bovespa stock index has slipped 0.7 percent.

“Comgas has experienced a strong outperformance over the last few months, for which we find it hard to find fundamental support,” Paula Kovarsky, an analyst at Itau, wrote in a note to clients published yesterday.

The gas distributor trades at 16.4 times analysts’ earnings estimates for the next four quarters, compared with 11.6 times for the companies on the Bovespa index.

Comgas has jumped 29 percent since May 3, when Cosan SA Industria e Comercio, a renewable-energy and infrastructure company, announced it was acquiring a 60.1 percent stake in Comgas from BG Group Plc. The deal was completed in November.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at

To contact the editor responsible for this story: David Papadopoulos at

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