Falabella Gains After Pactual Rises Price Target: Santiago Mover

SACI Falabella, Chile’s largest publicly traded company, rose the most in three weeks after BTG Pactual increased its price target for the stock on expectations earnings will rise as the company opens new stores and malls.

Falabella advanced 1.3 percent to 5,500.2 pesos at the close of trading in Santiago in its third day of gains. Chile’s benchmark Ipsa index fell 0.6 percent.

BTG Pactual reiterated a buy rating for the Santiago-based retailer and increased its 12-month price target to 6,350 pesos per share from 6,100 pesos. BTG Pactual expects an expansion in Falabella’s margins and revenue growth to drive the stock higher, it said in an e-mailed note to clients dated Feb. 22.

“We continue to see upside to the shares as earnings growth materializes in 2013,” analysts Alonso Aramburu, Felipe Ucros, Fabio Montero and Mauricio Restrepo wrote in the note.

Revenue may grow 15 percent in 2013 as the retailer opens about 40 new stores and four malls, BTG Pactual said. Earnings before interest, tax, depreciation and amortization, or Ebitda, will advance 24 percent, the firm projected. Earnings per share may rise 34 percent, BTG Pactual said.

Falabella operates shopping malls, department stores, supermarkets and home improvement stores in Chile, Peru, Colombia and Argentina.