10 Worst Performing Utility Stocks in 2024

8. Centrais Eletricas Brasileiras (NYSE:EBR)  

YTD Performance as of October 15: -18.79%  

Market Cap as of October 15: $15.78 Billion  

Number of Hedge Fund Investors: 6

Centrais Eletricas Brasileiras (NYSE:EBR), commonly known as Eletrobras, is the largest power utility company in Latin America, with operations in electricity generation, transmission, and distribution across Brazil. The company operates a significant portfolio of hydroelectric plants and plays a crucial role in Brazil’s electricity market.

In Q2, Centrais Eletricas Brasileiras (NYSE:EBR) reported a net income of $110 million, despite a 25.8% annual reduction due to higher operating costs and financial expenses. However, the company’s adjusted EBITDA margin of 50.1% and net debt of $8 billion with a leverage ratio of 1.95x, demonstrate its solid financial health.

In Q2, Centrais Eletricas Brasileiras (NYSE:EBR) performance was marked by a 9.1% annual increase in regulatory net operating revenue and a 10% increase in energy volume. However, total operating costs increased by 32.7% year over year, mainly due to charges for using the electricity grid and higher costs for purchased energy. Despite these challenges, Centrais Eletricas Brasileiras (NYSE:EBR) continues to invest in its transmission segment, with $357 million in Q2.

Centrais Eletricas Brasileiras (NYSE:EBR) is a compelling investment opportunity for value investors seeking a high-quality company with a strong track record of profitability and a solid financial profile. Despite a mixed Q2 performance, the company continues to show excellent signs of improvement, including a reduction in operating expenses, strategic divestment of non-core assets, and a strengthened capital structure. The company is expected to achieve 32.25% earnings growth in this year. With a consensus Buy rating from industry analysts, the stock has a target price of $10.40, which represents a 41.71% upside potential from its current level.