Zacks Investment Research upgraded shares of Companhia Paranaense De Energia (ELP) from UNDERPERFORM to NEUTRAL on November 28, 2013, with a target price of $14.00.
COPEL's third quarter 2013 result was weak as earnings per ADR at $0.44 plummeted 14.5% year over year despite a 10.5% increase in revenues. Electricity sales to final customers and distributors were strong. Operating costs and expenses increased 15.7%. We believe higher operating expenses, political interference and unpredictable weather conditions are major causes of concern. Restricted by the near-term concerns, we upgrade COPEL from Underperform to just Neutral recommendation. The upgrade is backed by our belief in COPEL's long-term growth prospects. Resumption of economic growth and industrial development in Brazil have spurred demand for electricity in the country. To leverage benefits, COPEL has plans to invest $1.9 billion in 2013 aimed at improving its internal generation capacity and distribution network. Rewarding shareholders through dividend payments and efforts to reduce costs are also looked upon favorably.
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