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Companhia de Saneamento Basico (NYSE:SBS)‘s stock had its “underperform” rating reaffirmed by Zacks in a report issued on Friday. They currently have a $8.50 price objective on the stock. Zacks‘s price target suggests a potential downside of 9.48% from the stock’s previous close.

Zacks’ analyst wrote, “SABESP’s long-term growth prospects are bright as growing economy and population in Brazil has boosted demand for better water and sewage facilities. The company plans to capitalize on this opportunity by improving its services. It targets to achieve 100% water and 95% sewage coverage ratio by 2020. Despite these positives, poor financial performance as well as near-term risks surrounding the stock, justifies our Underperform recommendation on the stock. In second-quarter 2014, earnings came in at $0.19 per ADR, down 27% year over year. Billed water and sewage volume declined 1.8%, while costs and expenses grew 14.8%. In addition to rising expenses, foreign currency translation risks, governmental interference and dependence on electricity as a source of energy may prove to be potential headwinds. “

Companhia de Saneamento Basico (NYSE:SBS) traded up 0.75% during mid-day trading on Friday, hitting $9.46. The stock had a trading volume of 891,817 shares. Companhia de Saneamento Basico has a 1-year low of $8.16 and a 1-year high of $11.50. The stock’s 50-day moving average is $9.38 and its 200-day moving average is $9.58. The company has a market cap of $6.466 billion and a P/E ratio of 7.88.

Companhia de Saneamento Basico (NYSE:SBS) last issued its quarterly earnings data on Monday, August 18th. The company reported $0.19 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.16 by $0.03. Analysts expect that Companhia de Saneamento Basico will post $0.93 EPS for the current fiscal year.

SBS has been the subject of a number of other recent research reports. Analysts at Citigroup Inc. downgraded shares of Companhia de Saneamento Basico from a “neutral” rating to a “sell” rating in a research note on Monday, July 14th. Analysts at Scotiabank downgraded shares of Companhia de Saneamento Basico from an “outperform” rating to a “sector perform” rating in a research note on Wednesday, July 2nd.

Companhia de Saneamento Basico do Estado de Sao Paulo – SABESP (NYSE:SBS) is a Brazil-based company which provides basic and environmental sanitation services in the domestic market.

To view Zacks’ full report, visit Zacks’ official website.

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