BICE Inversiones upgrades Sonda's target price, maintains buy rating

Tuesday, November 29, 2011

Chilean investment bank BICE Inversiones has upgraded its year-end 2012 target price for Chilean IT systems integrator Sonda to 1,525 pesos a share from the current 1,241 pesos per share, the bank said in a report.

The bank maintains its buy rating on the shares.

BICE Inversiones bases the upgrade on its view of Sonda's strong growth opportunities, mainly in Brazil, Mexico and the rest of Latin America. This should compensate medium-term margin compressions in Chile due to the more mature nature of the company's home market.

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"We maintain our buy recommendation based on strong growth projections in the industry, the robustness of Sonda's business model, margin improvements outside Chile, and organic and non-organic growth opportunities," BICE Inversiones said.

According to the bank, the main risks seen affecting the recommendation include a slowdown in global economic growth, changes in regulations and taxation, margin deterioration in mature markets and contract renewal risks.

Use this link to see BICE Inversiones' full report.