UBS Cuts CCR to Neutral

UBS Pactual has downgraded Brazil highway concession operator CCR to neutral from buy as it believes the stock trades right up against the inherent fair value of the company’s portfolio, making for materially less compelling risk/reward. The shop forecasts significantly higher net debt relating to leverage taken on to fund Rodoanel, driving financial expenses higher and leading to net income declines in both 2009 and 2010. UBS expects net debt to rise to BRL4.3bn this year and BRL5.2bn in 2010. The shop left the stock price target unchanged at BRL27.75. CCR’s stock closed at BRL27.64 May 11.