[RESEARCH BLOG] · 2026-07-30
ELPC (Companhia Paranaense de Energia) – SELL Signal as Valuation Tightens in a Recovery‑Phase Market
By Pierre Brunelle · Founder & Research Lead
Companhia Paranaense de Energia (ELPC) closed at $11.41, down 1.81 % on 2026‑07‑29 (Wednesday), triggering a SELL directional signal from LOPJLB’s quantitative model while the broader market is classified in a RECOVERY regime.
Recent News Flow
4 Discounted PEG Value Picks Following the June CPI Inflation Report highlighted ELPC on July 20, 2026 as one of four discounted PEG‑value picks that emerged after the June CPI inflation report, noting the company’s low PEG of 0.11 and its attractive dividend yield relative to peers.
Is Companhia Paranaense de Energia - Copel Unsponsored ADR (ELPC) Stock Outpacing Its Utilities Peers This Year? published on June 29, 2026 pointed to ELPC’s forward P/E of 2.71, robust free‑cash‑flow yield (over 85 %) and a 6.85 % dividend payout as drivers of its outperformance versus the broader utilities index.
Is Companhia Paranaense de Energia - Copel Unsponsored ADR (ELPC) Outperforming Other Utilities Stocks This Year? from June 11, 2026 argued that ELPC was “outperforming other utilities stocks this year,” emphasizing the firm’s EV/EBITDA of 4.44 and a gross margin of 25.47 %, which together suggest pricing power in Brazil’s regulated electricity market.
Are Utilities Stocks Lagging Companhia Paranaense de Energia - Copel Unsponsored ADR (ELPC) This Year? on April 30, 2026 cited ELPC’s price‑to‑book of 0.46 and P/FCF of 1.17 as evidence that the stock was trading at a deep discount to its intrinsic asset base.
Companhia Paranaense de Energia - COPEL (ELPC) Q1 2026 Earnings Call Transcript posted on May 6, 2026, making the full discussion of the quarter’s results publicly available for analysts and investors.
Fundamentals and Valuation
ELPC’s valuation metrics sit at the very low end of the utilities universe, reflecting both the company’s regulated revenue profile and the market’s pricing of Brazil‑specific risk. The trailing P/E stands at 4.04, while the forward P/E contracts further to 2.71, implying that earnings are expected to accelerate relative to the current price. The PEG ratio of 0.11 underscores that earnings growth expectations are modestly priced into the stock.
On a balance‑sheet basis, the price‑to‑book (P/B) ratio of 0.46 signals that the market values ELPC at less than half of its net asset value, a rare occurrence for a capital‑intensive utility. The price‑to‑free‑cash‑flow (P/FCF) of 1.17 and an eye‑popping free‑cash‑flow yield of 85.24 % indicate that cash generation far exceeds the price paid for the equity.
Enterprise‑value multiples reinforce the discount narrative: EV/EBITDA is 4.44 and EV/EBIT is 5.71, both well below the typical 8‑12 range for global utilities. The dividend yield of 6.85 % is comfortably above the sector average, while the buyback yield of 0.05 % remains negligible, suggesting that most shareholder returns are delivered via dividends.
Profitability and Return Metrics
ELPC’s profitability is anchored by solid margins: a gross margin of 25.47 %, operating margin of 18.98 %, and net margin of 9.97 % for the most recent twelve‑month period. Return figures are respectable for a regulated utility: ROE of 10.85 %, ROA of 4.32 %, and ROIC of 9.94 %. These returns exceed the cost of capital implied by the company’s debt‑to‑equity ratio of 99.10 %, though the leverage level remains high relative to peers.
Growth Profile
Revenue growth remains robust at 17.92 % YoY, driven by a combination of tariff adjustments and expansion of the transmission network. However, EPS growth has turned negative at –7.65 %, reflecting higher depreciation and amortization as the firm invests in new generation assets. The divergence between top‑line expansion and bottom‑line compression is a key focus for analysts.
Historical Snapshot
| Year‑end | Revenue (US$ bn) | EPS (US$) | Free‑Cash‑Flow (US$ bn) | P/E | Gross % | Op % | Net % | ROE % | ROA % |
|---|---|---|---|---|---|---|---|---|---|
| 2020 | 18.63 | 4.43 | 0.72 | 1.79 | 28.37 | 26.25 | 20.95 | 19.56 | 8.35 |
| 2021 | –13.33* | 4.16 | 0.56 | 1.51 | 225.4† | –21.87 | –37.17 | 22.68 | 10.00 |
| 2022 | 20.54 | 6.52 | 0.68 | 6.40 | 24.01 | 6.23 | 5.42 | 5.34 | 2.24 |
| 2023 | 21.48 | 2.56 | 0.66 | 2.99 | 22.80 | 14.83 | 10.52 | 9.46 | 4.05 |
| 2024 | 22.65 | 17.28 | 0.60 | 2.14 | 21.59 | 15.91 | 12.40 | 10.94 | 4.90 |
| 2025 | 25.60 | 14.24 | 2.81 | 3.67 | 21.26 | 17.62 | 10.29 | 11.40 | 4.36 |
*Negative revenue in 2021 reflects a reporting adjustment; the figure is retained for completeness.
†The 2021 gross margin figure appears inflated due to a one‑off accounting entry.
The table illustrates a clear upward trajectory in revenue and operating efficiency, even as earnings volatility has increased. The P/E has risen from deep‑value levels in 2020‑21 to a still‑low 4.04 today, indicating that the market has begun to price in the earnings volatility while still rewarding the firm’s cash‑generation capacity.
Valuation Snapshot
| Metric | Value |
|---|---|
| Trailing P/E | 4.04 |
| Forward P/E | 2.71 |
| EV/EBITDA | 4.44 |
| EV/EBIT | 5.71 |
| P/B | 0.46 |
| P/FCF | 1.17 |
| Dividend Yield | 6.85 % |
| Free‑Cash‑Flow Yield | 85.24 % |
| PEG | 0.11 |
Overall, ELPC trades at a steep discount to both its book value and cash‑flow generation, while delivering a dividend yield that comfortably exceeds the sector average. The combination of low multiples and high cash yields is rare in the utilities space, especially amid Brazil’s macro‑economic headwinds.
ETF Ownership
ELPC’s shareholding is concentrated among a handful of thematic ETFs that focus on emerging‑market and Brazilian equities. The three largest holders are:
These ETFs collectively own roughly 8 % of the float, providing a modest but notable source of liquidity. Concentrated ETF ownership can amplify price movements when the funds rebalance, especially in a recovery regime where risk‑on flows may shift rapidly between emerging‑market baskets.
LOPJLB Signal Read
The LOPJLB model currently flags ELPC with a SELL directional signal and assigns a Score of –5. The signal is generated within a RECOVERY market regime that has persisted for 32 days, indicating that broader equity momentum is turning positive after a prior decline.
Composite performance metrics show a PERF score of 23.60, suggesting that recent price action has been relatively strong, while the FUND quality score of 81.60 reflects solid underlying fundamentals. The stock scores 44.00 on value, 64.00 on growth, and a perfect 100.0 on GARP, positioning it as a Value / Recovery archetype in LOPJLB’s taxonomy.
Investors can explore the interactive chart above on this page for a visual overlay of the model’s technical and regime indicators. For a deeper dive into the methodology behind the signal, visit the LOPJLB methodology page.
Further Research
- Detailed stock profile: https://www.lopjlb.com/stock/ELPC
- Earnings‑call archive (if applicable): https://www.lopjlb.com/stock/ELPC/earnings.md
- Full‑screen stock screener: https://www.lopjlb.com/screener
The information presented here is for research purposes only and does not constitute investment advice. All data are sourced from publicly available filings, news releases, and LOPJLB’s proprietary analytics.
This post is independent quantitative research, not investment advice. LOPJLB signals are model outputs derived from price, volume, and fundamentals. Past backtests do not guarantee future results. Position sizing, execution, and risk management remain the reader's responsibility.