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Equatorial Energia SA
(OTC:EQUEY)
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Rating:47Neutral
Price Target:
$6.50
▼(-14.02% Downside)
Action:Reiterated
Date:08/17/26
The score is held back primarily by weak financial quality—compressed net profitability, high leverage, and negative free cash flow—despite strong revenue growth and decent operating margins. The latest earnings call adds some support from improving distribution operations and balance-sheet actions, but the sharp drop in adjusted net income and higher leverage keep the risk profile elevated. Technicals are mildly bearish/neutral, and valuation is challenged by a high P/E despite an attractive dividend yield.
Positive Factors
Regulated revenue growth
The regulated distribution model provides recurring revenue supported by concession areas, tariff mechanisms and investment remuneration. Strong recent growth and a solid operating margin indicate durable demand and an established infrastructure base.
Negative Factors
High leverage
Heavy leverage reduces financial flexibility and makes earnings more sensitive to interest rates. The acquisition increased debt near the stated covenant boundary, potentially limiting additional investment or strategic capacity until deleveraging occurs.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulated revenue growth
The regulated distribution model provides recurring revenue supported by concession areas, tariff mechanisms and investment remuneration. Strong recent growth and a solid operating margin indicate durable demand and an established infrastructure base.
Read all positive factors
Equatorial Energia SA (EQUEY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.37B
Dividend Yield6.08%
Average Volume (3M)339.00
Price to Earnings (P/E)46.5
Beta (1Y)0.17
Revenue Growth18.24%
EPS Growth-71.57%
CountryUS
Employees11,571
SectorUtilities
Sector Strength65
IndustryRegulated Electric
Share Statistics
EPS (TTM)0.76
Shares Outstanding1,259,387,100
10 Day Avg. Volume236
30 Day Avg. Volume339
Financial Highlights & Ratios
PEG Ratio-0.70
Price to Book (P/B)1.88
Price to Sales (P/S)0.98
P/FCF Ratio-11.99
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Equatorial Energia SA Business Overview & Revenue Model
Company Description
Equatorial SA is a holding company, which invests in the capital stock of other companies, consortiums, and undertakings that operate in the electricity sector or in similar activities. It operates through the following segments: Energy Distributi...
How the Company Makes Money
Equatorial Energia makes money mainly through regulated electricity distribution. In Brazil, distribution companies are paid for providing access to and operating the local power grid (the “wires” business), rather than for generating electricity....
Equatorial Energia SA Earnings Call Summary
Earnings Call Date:Aug 12, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Neutral
The call presented a mixed picture: strong operational performance in the distribution businesses (market growth, margin expansion, improved service quality and lower compensation payments) and progress on strategic initiatives and liability relief. These positives were offset by material financial headwinds — an 80.1% drop in adjusted net income (ex-clients), higher leverage (net debt/EBITDA up 0.4x to 3.1x), increased financial expenses from higher interest rates and acquisition-related debt, and weakness in the renewables segment (adjusted EBITDA down 22.6%). Management emphasized regulatory milestones, tariff review timing and actions to improve collections and capital structure, but near-term profitability is constrained by financing costs and generation curtailments.Positive Updates
Improved Consolidated Gross Margin
Consolidated gross margin increased by 7.7%, driven mainly by the distribution segment and higher wire B tariff.
Negative Updates
Sharp Decline in Adjusted Net Income (Excluding One-offs)
Adjusted net income (excluding the Acordo Gaúcho gain and transmission results) decreased 80.1%, primarily due to higher financial expenses from rising interest rates and increased debt from the acquisition cycle.
Read all updates
Q2-2026 Updates
Positive
Negative
Improved Consolidated Gross Margin
Consolidated gross margin increased by 7.7%, driven mainly by the distribution segment and higher wire B tariff.
Read all positive updates
Company Guidance
Management guided that near‑term priorities are integrating the Copasa acquisition and preserving financial flexibility while funding quality‑focused investments: the Copasa stake required a 5.6bn payment funded from BRL7.6bn raised this quarter (BRL5.1bn used at an average cost of CDI+0.8%), group CDI‑linked debt sits at CDI+0.57 with average maturities ~5.9 years (5.6 yrs including Copasa), net‑debt/EBITDA is 3.1x (+0.4x QoQ) vs. a 3.3x covenant and a target capital structure of 3–3.5x (3.0x in high‑rate scenarios); they expect to complete settlement of a BRL2.8bn liability program (BRL911m added, a 75% interest/penalty discount ≈ $355m already reflected, and up to 60% of the remainder may be settled with discounted government receivables) in H2, will keep strict cost discipline while investing (Q2 capex BRL2.6bn, -4%), and plan to rely on tariff reviews (RS and Amapá in 2026; Pará 2027; Goiás/Piauí thereafter) to help lift EBITDA — current operating metrics cited include injected energy +4.7%, wire‑B market +4.2% (5% adjusted for billing shift), collection 97.32%, expected credit losses 1.26%, distribution gross margin +10.4% and distribution adjusted EBITDA +8%, while group adjusted EBITDA for the quarter was $3m and adjusted net income ex‑one‑offs fell 80.1%.Equatorial Energia SA Financial Statement Overview
Summary
Income Statement
60
Neutral
Balance Sheet
48
Neutral
Cash Flow
35
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 52.29B | 49.25B | 43.17B | 40.99B | 26.22B | 23.61B |
| Gross Profit | 12.00B | 10.79B | 10.86B | 10.23B | 7.65B | 6.27B |
| EBITDA | 8.42B | 8.27B | 11.00B | 9.72B | 7.17B | 6.21B |
| Net Income | 961.49M | 1.65B | 2.81B | 2.08B | 1.37B | 3.69B |
Balance Sheet | ||||||
| Total Assets | 118.94B | 109.55B | 116.41B | 103.64B | 90.62B | 61.71B |
| Cash, Cash Equivalents and Short-Term Investments | 8.96B | 10.48B | 13.04B | 12.24B | 7.88B | 10.37B |
| Total Debt | 65.14B | 54.54B | 55.93B | 46.56B | 41.30B | 25.46B |
| Total Liabilities | 90.23B | 81.24B | 86.52B | 78.36B | 72.05B | 47.11B |
| Stockholders Equity | 26.13B | 25.74B | 26.11B | 21.09B | 16.61B | 12.76B |
Cash Flow | ||||||
| Free Cash Flow | -2.86B | -4.04B | 4.21B | -6.01B | 3.23B | 330.16M |
| Operating Cash Flow | 2.96B | 3.90B | 4.25B | 3.14B | 3.47B | 1.30B |
| Investing Cash Flow | -7.73B | -2.81B | -14.19B | -7.49B | -8.74B | -4.74B |
| Financing Cash Flow | 7.73B | -1.72B | 8.63B | 5.80B | 5.44B | 4.21B |
Equatorial Energia SA Technical Analysis
Negative
7.56
Price Trends
7.46
Negative
7.86
Negative
7.66
Negative
Market Momentum
-0.18
Positive
36.15
Neutral
20.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EQUEY, the sentiment is Negative. The current price of 7.56 is above the 20-day moving average (MA) of 7.38, above the 50-day MA of 7.46, and below the 200-day MA of 7.66, indicating a bearish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 36.15 is Neutral, neither overbought nor oversold. The STOCH value of 20.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EQUEY.
Equatorial Energia SA Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $6.08B | 10.87 | 10.70% | 4.41% | 9.54% | 294.77% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
64 Neutral | $2.05B | 6.49 | 17.76% | ― | 50.81% | 107.08% | |
58 Neutral | $1.06B | 6.23 | 14.48% | ― | 1.93% | -35.13% | |
47 Neutral | $8.37B | 46.45 | 5.73% | 5.58% | 18.24% | -71.57% |
* Utilities Sector Average
EQUEY
Equatorial Energia SA
6.95
0.59
9.23%
EDN
Edenor SA
22.30
-1.25
-5.31%
ENIC
Enel Chile SA
4.44
1.10
32.97%
CEPU
Central Puerto SA
12.98
1.96
17.79%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.