Sabesp (SBSP3) announced on Wednesday (9) the definitive discharge of precatory due to the company by the City of São Paulo, referring to old accounts not paid for water supply services and sewage collection/treatment. These unpaid accounts have been negotiated since 2024 and Sabesp will finally receive $ 1.48 billion over the next six months, which implies a discount of $ 2.48 billion in the nominal debt value. At 10:22 am, the company’s share went up 1.44%at R $ 104.50.
Bradesco BBI values the ad as positive, as Sabesp will receive about $ 1.5 billion for a fully provisioned asset, ie zeroed on its balance. Regarding the discount applied in relation to the nominal value of the receivable, and how this compares to market expectations, the bank believes it will be seen as neutral/positive – as it was expected to grant a discount to end negotiations.
In practical terms, according to BBI, as the receivable has been fully provisioned, Sabesp is likely to account for a capital gain of R $ 1.5 billion in the year 2025, assuming taxes, the positive impact on net profit would be R $ 1.0 billion, equivalent to 1.4% of the market value, which would lead to net profit projection to R $ 4.7 billions.
In addition, with a dividend payment from 25%to 2025, extra income would be approximately 0.5%, bringing the total dividend yield to close to 2%.
Bradesco BBI reiterated recommendation outperform (Above average market performance, equivalent to purchase) for Sabesp, with target price of $ 135.
Itaú BBA also sees the news as positive, as the receivables were not considered in their base scenario. In addition, by including this extraordinary impact on its dividend projections – assuming that the R $ 1.48 billion is tax net – the estimated additional income for 2025 would be 2%.
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Itaú BBA reiterated recommendation outperform and target price of R $ 132.21. The company remains one of the bank’s main choices due to its attractive assessment (negotiated at the 0.99 time firm value (EV)/RAB 2025, with real 12.3%), strong EBITDA growth, low leverage and value generation potential by bidding for new concessions.
In the same vein as BBI and BBA, Genius Investimentos evaluates the event as positive because it is something it does not expect and was not part of the evaluation. “The value in question represents 2.1% of the current market value of the company and, in theory, could be used to pay extraordinary dividends – which should not happen due to restriction to the distribution of company dividends in its early years whose focus should be on the universalization of water and sewage services,” says the broker.
The genius also maintained purchase recommendation and target price of $ 120.