Central Puerto S.A. (CEPU.BA) fair value

ACCE thesis

Central Puerto runs one of Argentina's largest private power generation fleets, selling electricity into the wholesale market (MEM) from gas-fired plants and, increasingly, wind and solar assets, alongside a growing renewables and gas-trading business. Its edge is scale and a low-cost thermal base in a market where generation capacity has historically been the binding constraint, which gives it pricing power as the regulator moves tariffs toward cost recovery. The near-term driver is the normalization of wholesale electricity prices and the continued build-out of its renewables pipeline, which together should keep revenue compounding well above inflation even as reported growth is flattered by peso devaluation. The stock screens at roughly 6.4 times trailing earnings and 6.1 times forward, with a 19.0% return on equity and a 24.8% operating margin, which is hard to find elsewhere in the local equity market. The discount reflects real risks, though: currency and inflation distortions in the reported figures, regulatory and tariff-policy uncertainty, and index exclusion that limits passive demand, so the work to do is separating the inflation-driven revenue line from underlying volume and price.