Concha & Toro Rallies to Four-Year High After Citigroup Says BuyCarolina Millan
Vina Concha & Toro SA, Chile’s largest wine exporter, climbed to a four-year high after Citigroup Inc. recommended buying the stock on prospects a weakening peso will boost earnings.
The shares rose 0.8 percent to 1,270 pesos at 3:44 p.m. in Santiago, the highest level on a closing basis since August 2010. The company’s American depositary receipts jumped 3.1 percent to $40.93, set for a five-month high.
Concha & Toro was raised from neutral at Citigroup, which also increased its profitability estimates for the Santiago-based company by about 10 percent this year and in 2016. With exports accounting for about two-thirds of last year’s sales, the winemaker should benefit from a decline in the Chilean currency, according to Citigroup. The peso has tumbled 11 percent in the past 12 months.
“We expect strong export volume growth,” Citigroup analysts led by Alexander Robarts wrote in a Feb. 12 note to clients. In addition, “the recovery of the grape inventory levels in Chile has pushed down prices.”
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