BPI bets in EDP, Jerónimo Martins and Navigator in 2020

CaixaBank/BPI keeps EDP, Jerónimo Martins and Navigator shares on the list of favourites for next year, pointing to potential gains of up to 40%. In the opposite direction, Nos bounces off the list of favourites on the Lisbon Stock Exchange.

The bank published this week the Iberian Book, where it launches its “forecasts” for the Portuguese and Spanish markets in 2020. At the PSI-20, where attractive valuations are expected in most of the listed companies, there is a trio that continues to attract the CaixaBank/BPI analysts’ attention.

EDP is one of them. “The solid strategy brings accelerated growth through the rotation of assets in the amount of four billion and the sale of assets in the amount of two billion, allowing an investment plan (CAPEX) of 12 billion until 2022, mainly focused on renewable energies,” explain the bank’s analysts. They attribute to the bond a target price of 4.50 euros, anticipating a potential valuation of 21% for Portuguese electricity.

They recommend “buying” EDP on the basis of “potential catalysts for mergers and acquisitions, attractive growth, higher dividend, fewer demanding and fundamental multiples on the rise”, reinforces the bank.

In relation to Jerónimo Martins, the target price of 18.65 euros brings with it a potential increase of 25%, with analysts saying yes to the retailer’s operations in Poland and Colombia. “The Polish operation continues to perform better in relation to a market that should maintain its growth patterns in 2020. Colombia is an important driver in 2020-2021,” notes CaixBank/BPI. Recommendation: “Buy”.

In Navigator’s case, the rise in paper prices augurs a good year for the papermaker. The bank says that “the company faces the prospect of more favourable results, offering a solid generation of cash flow and a sustainable dividend”, with the dividend yield of around 8%. It gives Navigator papers a target price of 5.10 euros, which gives a potential gain of 40%.