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NEOE

Neoenergia BOVESPA:NEOE3 Stock Report

Last Price

R$16.75

Market Cap

R$20.3b

7D

4.6%

1Y

0.6%

Updated

12 Aug, 2022

Data

Company Financials +
NEOE3 fundamental analysis
Snowflake Score
Valuation6/6
Future Growth1/6
Past Performance2/6
Financial Health2/6
Dividends2/6

NEOE3 Stock Overview

Neoenergia S.A. generates, transmits, distributes, trades in, and commercializes electric energy in Brazil.

Neoenergia Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Neoenergia
Historical stock prices
Current Share PriceR$16.75
52 Week HighR$19.34
52 Week LowR$13.32
Beta0.74
1 Month Change18.21%
3 Month Change-5.26%
1 Year Change0.60%
3 Year Change-21.18%
5 Year Changen/a
Change since IPO4.69%

Recent News & Updates

Aug 10
Does Neoenergia (BVMF:NEOE3) Have A Healthy Balance Sheet?

Does Neoenergia (BVMF:NEOE3) Have A Healthy Balance Sheet?

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...

May 28
Investors Will Want Neoenergia's (BVMF:NEOE3) Growth In ROCE To Persist

Investors Will Want Neoenergia's (BVMF:NEOE3) Growth In ROCE To Persist

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key...

Shareholder Returns

NEOE3BR Electric UtilitiesBR Market
7D4.6%0.3%2.8%
1Y0.6%10.4%-18.9%

Return vs Industry: NEOE3 underperformed the BR Electric Utilities industry which returned 9.5% over the past year.

Return vs Market: NEOE3 exceeded the BR Market which returned -18.9% over the past year.

Price Volatility

Is NEOE3's price volatile compared to industry and market?
NEOE3 volatility
NEOE3 Average Weekly Movement4.1%
Electric Utilities Industry Average Movement4.1%
Market Average Movement6.0%
10% most volatile stocks in BR Market9.4%
10% least volatile stocks in BR Market2.5%

Stable Share Price: NEOE3 is less volatile than 75% of BR stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: NEOE3's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
199715,058Eduardo Capelastegui Saizhttps://www.neoenergia.com

Neoenergia S.A. generates, transmits, distributes, trades in, and commercializes electric energy in Brazil. The company has an installed electricity generation capacity of approximately 4.1 gigawatts; operates 7 hydroelectric plants, 44 wind farms, 826 kilometers of transmission lines, and 8 substations; and distributes electricity to approximately 34 million in the states of Bahia, Pernambuco, Rio Grande do Norte, São Paulo, and Mato Grosso do Sul. It also provides energy management and trading related services.

Neoenergia Fundamentals Summary

How do Neoenergia's earnings and revenue compare to its market cap?
NEOE3 fundamental statistics
Market CapR$20.33b
Earnings (TTM)R$4.20b
Revenue (TTM)R$45.20b

4.8x

P/E Ratio

0.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
NEOE3 income statement (TTM)
RevenueR$45.20b
Cost of RevenueR$34.72b
Gross ProfitR$10.49b
Other ExpensesR$6.28b
EarningsR$4.20b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 25, 2022

Earnings per share (EPS)3.46
Gross Margin23.20%
Net Profit Margin9.30%
Debt/Equity Ratio167.3%

How did NEOE3 perform over the long term?

See historical performance and comparison

Dividends

1.6%

Current Dividend Yield

8%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is NEOE3 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NEOE3?

Other financial metrics that can be useful for relative valuation.

NEOE3 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.3x
Enterprise Value/EBITDA4.7x
PEG Ratio0.7x

Price to Earnings Ratio vs Peers

How does NEOE3's PE Ratio compare to its peers?

NEOE3 PE Ratio vs Peers
The above table shows the PE ratio for NEOE3 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average10.1x
CPLE6 Companhia Paranaense de Energia - COPEL
8.7x13.9%R$18.8b
ENMT4 Energisa Mato Grosso - Distribuidora de Energia S/A
15.5xn/aR$18.3b
ENGI3 Energisa
10.8x10.3%R$19.2b
TRPL4 CTEEP - Companhia de Transmissão de Energia Elétrica Paulista
5.6x12.4%R$17.4b
NEOE3 Neoenergia
4.8x7.3%R$20.3b

Price-To-Earnings vs Peers: NEOE3 is good value based on its Price-To-Earnings Ratio (4.8x) compared to the peer average (10.1x).


Price to Earnings Ratio vs Industry

How does NEOE3's PE Ratio compare vs other companies in the BR Electric Utilities Industry?

Price-To-Earnings vs Industry: NEOE3 is good value based on its Price-To-Earnings Ratio (4.8x) compared to the BR Electric Utilities industry average (7.3x)


Price to Earnings Ratio vs Fair Ratio

What is NEOE3's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NEOE3 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio4.8x
Fair PE Ratio7.5x

Price-To-Earnings vs Fair Ratio: NEOE3 is good value based on its Price-To-Earnings Ratio (4.8x) compared to the estimated Fair Price-To-Earnings Ratio (7.5x).


Share Price vs Fair Value

What is the Fair Price of NEOE3 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NEOE3 (R$16.75) is trading below our estimate of fair value (R$72.05)

Significantly Below Fair Value: NEOE3 is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is Neoenergia forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


7.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NEOE3's forecast earnings growth (7.3% per year) is below the savings rate (9.2%).

Earnings vs Market: NEOE3's earnings (7.3% per year) are forecast to grow faster than the BR market (6.2% per year).

High Growth Earnings: NEOE3's earnings are forecast to grow, but not significantly.

Revenue vs Market: NEOE3's revenue (3.1% per year) is forecast to grow slower than the BR market (5.2% per year).

High Growth Revenue: NEOE3's revenue (3.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NEOE3's Return on Equity is forecast to be low in 3 years time (12.7%).


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Past Performance

How has Neoenergia performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


38.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NEOE3 has high quality earnings.

Growing Profit Margin: NEOE3's current net profit margins (9.3%) are lower than last year (10.2%).


Past Earnings Growth Analysis

Earnings Trend: NEOE3's earnings have grown significantly by 38.5% per year over the past 5 years.

Accelerating Growth: NEOE3's earnings growth over the past year (10.1%) is below its 5-year average (38.5% per year).

Earnings vs Industry: NEOE3 earnings growth over the past year (10.1%) underperformed the Electric Utilities industry 13.5%.


Return on Equity

High ROE: NEOE3's Return on Equity (16.7%) is considered low.


Discover strong past performing companies

Financial Health

How is Neoenergia's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: NEOE3's short term assets (R$22.2B) exceed its short term liabilities (R$17.9B).

Long Term Liabilities: NEOE3's short term assets (R$22.2B) do not cover its long term liabilities (R$46.6B).


Debt to Equity History and Analysis

Debt Level: NEOE3's net debt to equity ratio (140.8%) is considered high.

Reducing Debt: NEOE3's debt to equity ratio has increased from 146.5% to 167.3% over the past 5 years.

Debt Coverage: NEOE3's debt is not well covered by operating cash flow (4.9%).

Interest Coverage: NEOE3's interest payments on its debt are well covered by EBIT (4.1x coverage).


Balance Sheet


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Dividend

What is Neoenergia current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


1.61%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: NEOE3's dividend (1.61%) is higher than the bottom 25% of dividend payers in the BR market (1.57%).

High Dividend: NEOE3's dividend (1.61%) is low compared to the top 25% of dividend payers in the BR market (7.46%).


Stability and Growth of Payments

Stable Dividend: NEOE3 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: NEOE3 has only been paying a dividend for 3 years, and since then payments have fallen.


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (7.8%), NEOE3's dividend payments are thoroughly covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: NEOE3 is paying a dividend but the company has no free cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Eduardo Capelastegui Saiz (52 yo)

0.083

Tenure

Mr. Eduardo Capelastegui Saiz serves as Member of Executive Board and Executive Director of Patrimonial Control and Planning? at Neoenergia S.A and serves as its Director since June 2022. He is Chief Execu...


Leadership Team

Experienced Management: NEOE3's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

Experienced Board: NEOE3's board of directors are not considered experienced ( 1.6 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Neoenergia S.A.'s employee growth, exchange listings and data sources


Key Information

  • Name: Neoenergia S.A.
  • Ticker: NEOE3
  • Exchange: BOVESPA
  • Founded: 1997
  • Industry: Electric Utilities
  • Sector: Utilities
  • Implied Market Cap: R$20.331b
  • Shares outstanding: 1.21b
  • Website: https://www.neoenergia.com

Number of Employees


Location

  • Neoenergia S.A.
  • Praia do Flamengo 78
  • 4 Floor
  • Rio De Janeiro
  • Rio de Janeiro
  • 22210-030
  • Brazil

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/12 00:00
End of Day Share Price2022/08/12 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.