Bloomberg News

Copec Falls as JPMorgan Says Sell on Valuation: Santiago Mover

March 07, 2013

Empresas Copec SA (COPEC), Chile’s largest pulp exporter, fell to a two-month low after JPMorgan Chase & Co. recommended selling the stock, citing high valuation and slower growth prospects than its regional peers.

Copec dropped 1.7 percent to 7,970 pesos at 4:25 p.m. in Santiago, its lowest level on a closing basis since Jan. 8. The benchmark Ipsa index fell 0.5 percent.

JPMorgan initiated coverage of the stock with a rating equivalent to sell and a year-end price target of 7,300 pesos, saying the stock’s valuation isn’t “compelling” even when taking into account growth prospects, analysts Lucas Ferreira and Rodolfo R. De Angele said in a research note to clients.

“The lack of clear stock catalysts should limit re-rating potential, while valuation remains close to a cyclical peak,” the analysts wrote.

Copec is trading at 27.6 times its estimated earnings, above its five-year average ratio of 21.8, according to data compiled by Bloomberg. Klabin SA (KLBN4) and Duratex SA (DTEX3) will show higher returns, JPMorgan said in the note.

JPMorgan also initiated coverage of Empresas CMPC SA (CMPC), Chile’s second-largest pulp exporter, with the equivalent of a hold rating.

To contact the reporter on this story: Eduardo Thomson in Santiago at

To contact the editor responsible for this story: David Papadopoulos at

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