Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

PDG Falls as Citigroup Cuts to Hold on Costs, New Projects

Don't Miss Out —
Follow us on:

April 12 (Bloomberg) -- PDG Realty SA dropped the most in a week as Citigroup Inc. cut its recommendation on the Brazilian homebuilder to the equivalent of hold, citing higher than projected costs and an increase in new projects.

Shares slumped 4.3 percent to 2.70 reais at the close of trading in Sao Paulo, the most since April 3. The benchmark Bovespa index declined 0.8 percent.

Citigroup cut its recommendation from the equivalent of buy as PDG’s costs in the fourth quarter “exceeded probably even the most pessimistic expectations,” according to a note to clients today by Dan McGoey and Paola Mello. The homebuilder also has a goal to start new projects in 2015 that amount to between 5 billion reais ($2.5 billion) and 6 billion reais, “which implies heavier reinvestment in land and working capital,” the analysts wrote.

The Rio de Janeiro-based homebuilder said in a March 27 regulatory filing that new projects fell 80 percent to 1.7 billion reais in 2012 from 2011 and that there was a 1.4 billion real cost overrun in the fourth quarter of last year to resume projects that were previously entrusted to outsourced partners.

PDG has slid 18 percent this year while the Bovespa has declined 9.8 percent.

To contact the reporter on this story: Denyse Godoy in Sao Paulo at dgodoy2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.