RESEARCH ALERT-Three Brazil telecoms still buys
Thursday December 18, 4:39 pm Eastern Time
SAO PAULO, Dec 18 (Reuters) - HSBC James Capel said Thursday it maintained buy ratings on Brazilian telecoms Telesp (TLS_p.SA), Telerj (TER_p.SA) and Telemig (TMG_pb.SA), units of federal holding Telebras
(NYSE:TBR - news; TEL_p.SA).
HSBC James Capel analyst Paul Aran said ratings were kept despite stock dilution this year and next due to the issue of new shares stemming from capital increases associated with the end of Telebras' so-called ''autofinancing'' line purchase program.
-- said the brokerage has ''adjusted (its) price targets and earnings estimates to reflect this new dilution.''
-- said he cut his mid-year price target for Telerj, which serves Rio de Janeiro state, to $191 from $210 to reflect a 16.2 percent rise in total shares this year and a further six percent dilution in 1998.
-- said preferred shares of Telesp, which serves Sao Paulo state, suffered a 17 percent dilution, while common shares were diluted by eight percent in 1997.
-- said total Telesp shares should be further diluted by about three percent this year and that, while his $385 price target was left unchanged, earnings estimates for the firm would be ''fine tuned upwards.''
-- said Telemig shares were diluted 0.2 percent in 1997 and would suffer a one percent dilution in 1998 as a result of the share issue, but his price target remained unchanged.
Telesp preferred was off 2.61 percent at 279.50 reais, Telemig's preferred B dropped 3.67 percent to 118 reais and Telerj preferred was up 1.04 percent at 97.50 reais.
Common shares of Telesp plunged 6.25 percent to 225.01 reais, Telemig common was off 2.86 percent to 105 reais and Telerj common was off 1.71 percent at 86 reais. |
