Goldman Sachs Group analyst Carlos Macedo and his team cut the price target on shares in clearinghouse Cetip SA Mercados Organizados to 29.90 reais from 32.2 reais, to reflect a reduction in earnings estimates for the coming two years. Macedo maintained a “buy” recommendation.
The analysts said that early volumes for registration and custody of securities fail to suggest market share losses at Cetip, despite an expected increase in activity in that segment by financial bourse BM&FBovespa SA. “Even though volumes have been weaker, there is limited evidence of market share loss as of yet,” he wrote in a note.
At 11 times estimates earnings before interest, tax, depreciation and amortization, the company’s price-to-earnings ratio is trading at a discount to peers in the region, “which could tighten if reported volumes show resiliency,” Macedo and his team said.