Zacks Investment Research upgraded shares of Cosan Limited (CZZ) from UNDERPERFORM to NEUTRAL on June 21, 2013, with a target price of $17.00.
We find long-term growth prospects quite compelling for Cosan. The company's strategic acquisitions, growing sugar and ethanol demand, energy co-generation and transportation business seem to be the prime growth driving catalysts. In addition to this, the formation of new business units (Radar and Comgas), the company's association with Camil and the stake acquisitions in Comma and ALL would undoubtedly result in increased competitiveness in their respective businesses. For 2014, Cosan provided an impressive guidance anticipating higher revenues and EBITDA versus that of 2012 on the back of healthy performances by its business segments. Thus, we have upgraded the stock from Underperform to Neutral recommendation. Despite the upgrade, concerns arising from adverse weather conditions, rising competition, higher cost of sales and services as well as rising long-term debt cannot be ignored completely.
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