April 24 (Bloomberg) -- AES Gener SA, Chile’s second-biggest power generator by revenue, rallied to a record after Banchile-Citi raised its price target, citing potential profit gains as the company starts operations at power plants.
Shares increased 1.3 percent to 340.86 pesos at the close of trading in Santiago, a record high and its seventh consecutive day of gains. The Ipsa index was little changed.
Banchile-Citi, the joint research department of Banco de Chile and Citigroup Inc., reiterated in an e-mailed research note a buy recommendation and increased its price target to 393 pesos per share from 329 pesos.
“AES Gener is still our number one pick in the Chilean generation company universe,” analysts Andrew McCarthy and Marcelo Britto said in the research note. The company has “excellent medium-term earnings growth potential.”
Banchile-Citi said it increased its price target to include potential revenue from new projects. AES Gener is building two new coal-fired power plants, Cochrane and Guacolda 5, which will add 684 megawatts of generation capacity and will probably also begin construction of the Alto Maipo 531-megawatts hydroelectric plant this year, Banchile-Citi said.
Banchile-Citi also reiterated a buy rating for power generator E.CL SA and a hold rating for Colbun SA. E.CL fell 0.2 percent today while Colbun gained 1.6 percent.
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