Companhia de Saneamento Básico do Estado de São Paulo - SABESP

BOVESPA:SBSP3 Stock Report

Market Cap: R$56.6b

Companhia de Saneamento Básico do Estado de São Paulo - SABESP Valuation

Is SBSP3 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of SBSP3 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SBSP3 (R$82.79) is trading below our estimate of fair value (R$98.83)

Significantly Below Fair Value: SBSP3 is trading below fair value, but not by a significant amount.


Key Valuation Metric

Which metric is best to use when looking at relative valuation for SBSP3?

Other financial metrics that can be useful for relative valuation.

SBSP3 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/Revenue2.8x
Enterprise Value/EBITDA8.2x
PEG Ratio1.1x

Price to Earnings Ratio vs Peers

How does SBSP3's PE Ratio compare to its peers?

The above table shows the PE ratio for SBSP3 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average45.6x
CASN3 Companhia Catarinense de Águas e Saneamento - CASAN
163.8xn/aR$9.9b
CSMG3 Companhia de Saneamento de Minas Gerais
5.9x1.1%R$8.2b
SAPR4 Companhia de Saneamento do Paraná - SANEPAR
5.3x-3.5%R$7.8b
CPFE3 CPFL Energia
7.3x-3.2%R$40.3b
SBSP3 Companhia de Saneamento Básico do Estado de São Paulo - SABESP
16.1x15.1%R$56.6b

Price-To-Earnings vs Peers: SBSP3 is expensive based on its Price-To-Earnings Ratio (16.1x) compared to the peer average (6.2x).


Price to Earnings Ratio vs Industry

How does SBSP3's PE Ratio compare vs other companies in the Global Water Utilities Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a12.5%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a12.5%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: SBSP3 is good value based on its Price-To-Earnings Ratio (16.1x) compared to the Global Water Utilities industry average (16.7x).


Price to Earnings Ratio vs Fair Ratio

What is SBSP3'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.

SBSP3 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio16.1x
Fair PE Ratio15.2x

Price-To-Earnings vs Fair Ratio: SBSP3 is expensive based on its Price-To-Earnings Ratio (16.1x) compared to the estimated Fair Price-To-Earnings Ratio (15.2x).


Analyst Price Targets

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

The above table shows the analyst SBSP3 forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentR$82.79
R$95.34
+15.2%
19.5%R$125.00R$68.00n/a13
Apr ’25R$83.90
R$94.19
+12.3%
19.6%R$125.00R$67.00n/a14
Mar ’25R$79.67
R$84.30
+5.8%
13.6%R$111.00R$67.00n/a14
Feb ’25R$78.85
R$82.70
+4.9%
11.7%R$111.00R$67.00n/a14
Jan ’25R$75.37
R$79.91
+6.0%
9.4%R$92.00R$65.00n/a14
Dec ’24R$68.66
R$78.35
+14.1%
10.2%R$87.00R$59.00n/a14
Nov ’24R$59.41
R$73.22
+23.2%
14.8%R$87.00R$58.00n/a14
Oct ’24R$61.03
R$72.25
+18.4%
14.4%R$85.00R$58.00n/a13
Sep ’24R$58.72
R$69.28
+18.0%
13.3%R$85.00R$58.00n/a13
Aug ’24R$55.70
R$68.08
+22.2%
12.9%R$85.00R$57.00n/a12
Jul ’24R$56.57
R$70.00
+23.7%
13.8%R$88.00R$57.00n/a14
Jun ’24R$52.30
R$69.93
+33.7%
13.8%R$88.00R$57.00n/a14
May ’24R$46.13
R$68.40
+48.3%
15.8%R$88.00R$50.00n/a15
Apr ’24R$50.61
R$68.53
+35.4%
15.7%R$88.00R$50.00R$83.9015
Mar ’24R$52.08
R$67.72
+30.0%
16.1%R$88.00R$51.00R$79.6716
Feb ’24R$55.60
R$67.47
+21.4%
16.6%R$88.00R$51.00R$78.8516
Jan ’24R$57.16
R$64.92
+13.6%
17.0%R$88.00R$51.00R$75.3716
Dec ’23R$60.23
R$64.86
+7.7%
18.4%R$92.00R$50.00R$68.6616
Nov ’23R$60.28
R$61.79
+2.5%
17.4%R$92.00R$50.00R$59.4116
Oct ’23R$49.60
R$57.99
+16.9%
12.0%R$75.00R$49.00R$61.0317
Sep ’23R$49.00
R$56.79
+15.9%
11.9%R$75.00R$49.00R$58.7217
Aug ’23R$44.82
R$57.30
+27.8%
12.1%R$75.00R$49.00R$55.7016
Jul ’23R$43.00
R$55.06
+28.1%
8.4%R$65.00R$49.00R$56.5714
Jun ’23R$45.35
R$54.49
+20.2%
9.9%R$65.00R$45.00R$52.3014
May ’23R$44.53
R$53.76
+20.7%
8.8%R$60.00R$45.00R$46.1313
Apr ’23R$51.27
R$53.15
+3.7%
9.0%R$62.00R$45.00R$50.6113

Analyst Forecast: Target price is less than 20% higher than the current share price.


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