Companhia de saneamento Basico Do Estado De Sao Paulo - Sabesp American Depositary Shares (Each repstg 250 Common Shares) (SBS) : juste valeur

Thèse ACCE

Sabesp, the privatized water and sewage utility serving the São Paulo metropolitan region, earns almost all its revenue from regulated water and wastewater tariffs billed to tens of millions of people, with the state's sanitation concession giving it a near-monopoly footprint in Brazil's largest economy. The structural case rests on that regulated base: the company converts a 31.5% operating margin and 18.8% ROE into cash under a tariff framework that resets with inflation, and after the 2024 privatization it operates under a new contract with large sewage-collection and treatment investment commitments that should expand the asset base and lift revenue. Reported revenue growth of 13.9% and a trailing P/E of 15.3 (15.6 forward) put the stock at a modest multiple for that growth, though forward estimates are not flat, so the forward P/E sitting slightly above trailing is worth reconciling in the model. The main thing to test is whether the capex program converts into regulated returns without a tariff or regulatory slippage, given Brazil's inflation and interest-rate path and the currency exposure embedded in an ADR priced in dollars. At $23.7B market cap with no index membership, the name is a candidate for a deeper look on earnings quality, capex funding, and tariff-reset mechanics rather than a conclusion on its own.