Goldman Sachs has initiated research coverage of Copel (NYSE:ELPC) and assigned a Buy rating with a $10.40 price target, according to a research note released Wednesday. At the time of the note, the stock was trading at $10.62 - marginally below its 52-week high of $10.63 - after gaining 100.79% over the past year.
The bank's valuation is grounded in a sum-of-the-parts framework that applies a 7.4% real weighted average cost of capital (WACC). That valuation underpins Goldman Sachs' expectations for the company, which include stepping up shareholder returns through higher dividends and share repurchases.
Goldman Sachs projects dividend yields of 8% for 2026 and 10% for 2027. The firm also anticipates that Copel will pursue select NPV-positive growth investments and has specifically noted the company may participate in a reserve auction scheduled for March 2026.
On the operational front, Goldman Sachs expects Copel to deliver an EBITDA compound annual growth rate in excess of 20% between 2025 and 2027. The investment bank attributes much of this expected earnings acceleration to a distribution arm tariff review that is slated for June 2026.
Market-data referenced in the note shows Copel's market capitalization at $7.86 billion. According to InvestingPro assessments cited alongside the note, Copel appears slightly overvalued relative to its Fair Value estimate.
Collectively, the valuation approach, the projected dividend trajectory, and the planned or potential growth moves form the basis for Goldman Sachs' Buy recommendation and the $10.40 target. The firm highlights timing-sensitive catalysts - the March 2026 reserve auction and the June 2026 tariff review - as important events tied to its outlook.
Context and implications
The research note combines valuation methodology with event-driven expectations to form a concise forecast for Copel's near-term financial performance and capital return plans. While Goldman Sachs' outlook is bullish enough to justify a Buy rating, InvestingPro data referenced in the note indicates a modest premium to fair value at the company's current market capitalization.
The company-specific catalysts named by Goldman Sachs - a reserve auction and a regulatory tariff review - represent discrete occurrences that the firm expects will materially affect EBITDA and shareholder returns over the 2025-2027 period.