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Equatorial Energia SA
(OTC:EQUEY)
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Rating:49Neutral
Price Target:
$10.00
▲(38.50% Upside)
Action:Reiterated
Date:10/08/26
The score is held down primarily by weaker financial quality—sharp net profitability deterioration, high leverage, and persistent negative free cash flow. Technicals are a positive with a strong uptrend, but momentum is extremely stretched (high RSI/Stoch). Valuation is unfavorable due to a very high P/E despite only moderate dividend support. Earnings call commentary was mixed, with operational improvements offset by rising leverage and sharply lower adjusted earnings.
Positive Factors
Distribution Growth and Quality
The regulated distribution business is showing improving demand, profitability, and service quality across its concession base. Higher injected energy and EBITDA, together with better reliability, can strengthen customer service performance and support more durable regulated earnings over coming periods.
Negative Factors
High Leverage
Heavy leverage reduces financial flexibility for a regulated utility that must continue funding network investment and acquisitions. The elevated debt burden increases sensitivity to financing costs and leaves less capacity to absorb operating weakness or pursue strategic opportunities without additional funding.
Read all positive and negative factors
Positive Factors
Negative Factors
Distribution Growth and Quality
The regulated distribution business is showing improving demand, profitability, and service quality across its concession base. Higher injected energy and EBITDA, together with better reliability, can strengthen customer service performance and support more durable regulated earnings over coming periods.
Read all positive factors
Equatorial Energia SA (EQUEY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.51B
Dividend Yield4.29%
Average Volume (3M)1.00K
Price to Earnings (P/E)66.1
Beta (1Y)0.28
Revenue Growth18.24%
EPS Growth-71.57%
CountryUS
Employees11,571
SectorUtilities
Sector Strength65
IndustryRegulated Electric
Share Statistics
EPS (TTM)0.75
Shares Outstanding1,259,438,600
10 Day Avg. Volume2,091
30 Day Avg. Volume1,002
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 Cap1.61
Enterprise Value/Revenue0.39
Enterprise Value/Gross Profit1.68
Enterprise Value/Ebitda2.34
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 | 8.60B | 8.33B | 11.00B | 9.72B | 7.17B | 6.21B |
| Net Income | 950.48M | 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
Positive
7.22
Price Trends
7.67
Positive
7.62
Positive
7.78
Positive
Market Momentum
0.58
Negative
82.09
Negative
100.02
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EQUEY, the sentiment is Positive. The current price of 7.22 is below the 20-day moving average (MA) of 8.23, below the 50-day MA of 7.67, and below the 200-day MA of 7.78, indicating a bullish trend. The MACD of 0.58 indicates Negative momentum. The RSI at 82.09 is Negative, neither overbought nor oversold. The STOCH value of 100.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $10.50B | 17.00 | 12.91% | 3.67% | 26.97% | 11.70% | |
67 Neutral | $8.16B | 11.39 | 15.93% | 7.94% | 12.93% | -24.59% | |
67 Neutral | $6.09B | 10.83 | 10.70% | 4.31% | 9.54% | 294.77% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
64 Neutral | $9.61B | 20.32 | 9.56% | 3.66% | 0.63% | -6.14% | |
58 Neutral | $972.03M | 5.71 | 10.46% | ― | 1.93% | -35.13% | |
49 Neutral | $12.51B | 66.09 | 3.61% | 4.29% | 18.24% | -71.57% |
* Utilities Sector Average
EQUEY
Equatorial Energia SA
9.83
3.53
56.03%
CIG
Companhia Energetica Minas Gerais
2.40
0.63
35.21%
EDN
Edenor SA
20.22
0.19
0.95%
OGE
OGE Energy
46.50
2.20
4.97%
ENIC
Enel Chile SA
4.48
0.83
22.84%
ELPC
Companhia Paranaense de Energia Sponsored ADR
14.19
6.14
76.36%
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.