AES Gener Gains in Chile as BICE Says Buy on New Projects
The shares advanced 0.9 percent to 300 pesos at 12:49 p.m. in Santiago. Trading volume was 84 percent of the full-day average of the past three months. The benchmark IPSA (IPSA) index retreated 0.3 percent.
BICE raised its recommendation from hold as the company spends $3.15 billion to add about 1,083 megawatts of new generation capacity in Chile. Analysts Diego Eguiguren and Agustin Alvarez set a target price of 424 pesos for the end of 2014, saying revenue from those projects accounts for 33 pesos of that estimate.
“AES Gener has shown great ability to develop new projects, which is remarkable in the Chilean electric industry,” the analysts wrote in an e-mailed note to clients.
AES Gener, a unit of Arlington, Virginia-based AES Corp., fell to a 10-month low of 292.17 pesos on Sept. 25, which BICE attributed to an “overreaction” from investors after the company announced Sept. 17 it planned to sell $450 million in new shares.
“Although we can’t discard the possibility of short-term pressure on share prices, we think that these resources will be used in value-added projects,” the BICE analysts wrote.
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