Rossi Jumps in Sao Paulo as BTG Pactual Recommends Buying Stock
Rossi Residencial SA (RSID3), Brazil’s cheapest homebuilder on a price-to-earnings basis, jumped to a seven-week high after Grupo BTG Pactual (BBTG11) raised its recommendation on the stock to buy from the equivalent of hold.
The shares rose 5.6 percent to 3.77 reais at 12:32 p.m. in Sao Paulo after earlier advancing as much as 6.2 percent to the highest intraday price since Feb. 20. It was the biggest gainer on the BM&FBovespa Real Estate index, which added 0.6 percent.
BTG cut its 12-month price target for Rossi to 4.60 reais from 5 reais, according to a report today from the firm.
Rossi shares have surged 22 percent since April 1 after the homebuilder announced it is shifting its focus to building more expensive projects and away from subsidized low-income housing. The stock is still down 18 percent in 2013.
The shares now trade at 5.92 times estimated earnings over the next 12 months, compared with an average of 10.85 for all Brazilian homebuilders.
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