Upside case
Bull case
$275+720.7%
SBS would need investors to value it at roughly 28x earnings — about 25x more generous than today's 3x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewHoldUpdated May 1, 2026
Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Hold
Covering
7
analysts
2 bullish · 1 bearish · 7 covering SBS
Strong Buy
0
Buy
2
Hold
4
Sell
1
Strong Sell
0
Consensus Target
$24
-29.0% vs today
Scenario Range
$94 – $275
Model bear to bull value window
Coverage
7
Published analyst ratings
Valuation Context
3.4x
Forward P/E · Market cap $23.5B
SBS price targets
Three scenarios for where SBS stock could go
Current
~$34
Confidence
47 / 100
Updated
May 1, 2026
Where we are now
Current · $34
Bear
$94
Base
$204
Bull
$275
Market caseClosest to today
Base case
$204+510.2%
At 21x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$94+181.4%
The bear case assumes sentiment or fundamentals disappoint enough to push SBS down roughly 181% from the current price.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Companhia de Saneamento Básico do Estado de São Paulo - SABESP
SBS · NYSEUtilitiesRegulated WaterDecember year-end
Sabesp is a Brazilian water and sewage utility that provides essential water supply, wastewater treatment, and sanitation services to millions of customers in São Paulo state. It generates revenue primarily through regulated tariffs for water and sewage services — with residential customers forming the bulk of its user base — supplemented by commercial and industrial contracts. The company's key advantage is its natural monopoly as the state-sanctioned provider with extensive infrastructure — including thousands of kilometers of pipes and treatment facilities — that creates high barriers to entry.
Market Cap
$23.5B
Revenue TTM
$37.3B
Net Income TTM
$8.3B
Net Margin
22.2%
SBS Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
67%Exceptional
12 quarters tracked
Revenue Beat Rate
92%Exceptional
vs consensus estimates
Avg EPS Surprise
+51.4%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q2 2025
Q3 2025
Q4 2025
Q1 2026
Last 4 Quarters
EPS beats: 4 of 4Q2 2025
EPS
$0.36/$0.30
Revenue
$1.4B/$1.1B
Q3 2025
EPS
$0.50/$0.29
Revenue
$1.7B/$1.0B
Q4 2025
EPS
$0.33/$0.29
Revenue
$1.8B/$1.1B
Q1 2026
EPS
$0.51/$0.45
Revenue
$1.1B/$1.1B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q2 2025 | $0.36/$0.30 | +21.3% | $1.4B/$1.1B | +26.8% |
| Q3 2025 | $0.50/$0.29 | +73.7% | $1.7B/$1.0B | +62.8% |
| Q4 2025 | $0.33/$0.29 | +14.8% | $1.8B/$1.1B | +65.9% |
| Q1 2026 | $0.51/$0.45 | +14.6% | $1.1B/$1.1B | -1.3% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$38.1B
+2.1% YoY
FY2
$41.6B
+9.1% YoY
EPS Outlook
FY1
$12.96
+6.9% YoY
FY2
$14.78
+14.1% YoY
Trailing FCF (TTM)-$726M
FCF Margin: -1.9%
Next Earnings
May 11, 2026
Expected EPS
$0.35
Expected Revenue
$1.3B
SBS beat EPS estimates in 4 of 4 tracked quarters. A perfect track record raises the bar for the upcoming report.
SBS Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Significantly Undervalued
Fair value est. $230 — implies +589.8% from today's price.
Upside to Fair Value
589.8%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
SBS
13.7x
vs
S&P 500
25.1x
46% discount
vs Utilities Trailing P/E
SBS
13.7x
vs
Utilities
20.1x
32% discount
vs SBS 5Y Avg P/E
Today
13.7x
vs
5Y Average
2.1x
+554% premium
Forward PE
3.4x
S&P 500
19.1x
-82%
Utilities
17.5x
-80%
5Y Avg
—
—
Trailing PE
13.7x
S&P 500
25.1x
-46%
Utilities
20.1x
-32%
5Y Avg
2.1x
+554%
PEG Ratio
0.26x
S&P 500
1.72x
-85%
Utilities
1.69x
-85%
5Y Avg
—
—
EV/EBITDA
10.6x
S&P 500
15.2x
-30%
Utilities
11.4x
-6%
5Y Avg
3.1x
+242%
Price/FCF
—
S&P 500
21.1x
—
Utilities
15.1x
—
5Y Avg
5.4x
—
Price/Sales
3.1x
S&P 500
3.1x
-1%
Utilities
2.2x
+44%
5Y Avg
0.3x
+811%
Dividend Yield
2.05%
S&P 500
1.87%
+10%
Utilities
3.06%
-33%
5Y Avg
9.63%
-79%
| Metric | SBS | S&P 500 | Utilities | 5Y Avg SBS |
|---|---|---|---|---|
| Forward PE | 3.4x | 19.1x-82% | 17.5x-80% | — |
| Trailing PE | 13.7x | 25.1x-46% | 20.1x-32% | 2.1x+554% |
| PEG Ratio | 0.26x | 1.72x-85% | 1.69x-85% | — |
| EV/EBITDA | 10.6x | 15.2x-30% | 11.4x | 3.1x+242% |
| Price/FCF | — | 21.1x | 15.1x | 5.4x |
| Price/Sales | 3.1x | 3.1x | 2.2x+44% | 0.3x+811% |
| Dividend Yield | 2.05% | 1.87% | 3.06% | 9.63% |
SBS trades above S&P 500 benchmarks on 0 of 5 measured multiples — appears modestly priced relative to the S&P 500 on most measures.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolSBS Financial Health
Verdict
Exceptional
SBS earns 32.2% operating margin on regulated earnings, 2.0% dividend yield. Utilities carry higher leverage than industrials as a structural feature of the business model.
Regulated Operations
Revenue, regulated margins, and earnings
Revenue (TTM)
Trailing-twelve-month sales base
$37.3B
Revenue Growth
TTM vs prior year
-12.6%
Operating Margin
Operating income divided by revenue
32.2%
Net Margin
Net income divided by revenue
22.2%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$12.12
Operating Margin
Operating income over revenue — primary regulated earnings signal
32.2%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
13.1%
ROA
Return on assets, trailing twelve months
8.8%
Cash & Equivalents
Liquid assets on the balance sheet
$4.7B
Net Debt
Total debt minus cash
$35.3B
Debt Serviceability
Net debt as a multiple of annual free cash flow
—
Regulated utilities typically operate at 3–5× net debt/FCF — this is structural, not a risk flag.
ROE
Return on equity, trailing twelve months
20.2%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
2.4%
Dividend
2.0%
Buyback
0.4%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$466M
Dividend / Share
Annualized trailing dividend per share
$3.39
Payout Ratio
Share of earnings distributed as dividends
27.9%
Shares Outstanding
Declining as buybacks retire shares
684M
All figures from the trailing twelve months. Utilities operate with structural leverage (3–5× net debt/FCF) due to regulated, predictable cash flows.
Open full ratios pageSBS Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 29, 2026
High Risk
Regulatory Environment
SBS operates within a heavily regulated industry, and any changes in regulations or government policies can significantly impact its business operations and profitability. This regulatory risk is compounded by the potential for political instability in Brazil.
High Risk
Economic Conditions
The company's performance is closely tied to economic and political conditions in Brazil, as well as global economic trends. A deterioration in these conditions could adversely affect SBS's financial performance and stock price.
High Risk
Interest Rate Risk
Fluctuations in market interest rates can affect the cost of SBS's variable-rate debt, potentially leading to reduced net income. Given the company's Debt/Equity ratio of 0.95, increased interest rates could significantly impact its financial stability.
Medium
Market Volatility
General market fluctuations, economic slowdowns, and credit loss trends can negatively impact SBS's stock prices, irrespective of the company's operating results. This volatility poses a risk to investors looking for stable returns.
Medium
Leverage
SBS's Debt/Equity ratio of 0.95 indicates a moderate level of debt. While manageable, any significant increase in debt or challenges in servicing it could pose financial risks to the company.
Medium
System Failures and Security
Technology risks, including system failures or security breaches in core financial or payment processing systems, can disrupt operations and lead to lost revenue. Such operational risks are critical for maintaining service continuity.
Lower
Privatization Efforts
While privatization efforts may present opportunities for SBS, they also introduce uncertainties and risks related to ownership and operational changes. The impact of these efforts on the company's long-term strategy remains to be seen.
Lower
Foreign Currency Risk
Fluctuations in currency exchange rates can affect the value of international transactions and reported earnings. This risk is particularly relevant if SBS engages in significant cross-border activities.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why SBS Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 29, 2026
Post-Privatization Investment Cycle
SBS is experiencing an accelerating capital expenditure cycle aimed at expanding water and sewage infrastructure in São Paulo. The Regulated Asset Base (RAB) is projected to approach R$160 billion by 2030, which will enhance predictable earnings growth with regulatory returns of approximately 8%.
Privatization Efficiency Gains
The privatization of Sabesp has resulted in significant efficiency improvements and cost reductions, reflected in a record-high EV/EBITDA multiple. The reduction of government ownership has led to enhanced operational efficiency.
Infrastructure Expansion Contract
Sabesp has secured a contract to increase water access coverage from 62% to potentially 99% by 2033, which could drive a 50% revenue growth. This expansion is expected to be supported by substantial funding from banks.
Reduction of Water Loss
The company aims to decrease water loss from 30% to between 10% and 17% through infrastructure enhancements and fraud prevention measures. This initiative is expected to significantly improve operational efficiency and profitability.
Potential Copasa Acquisition
A potential acquisition of a 30% stake in Copasa could add nearly 10% to SBS's EBITDA. This acquisition may provide operational synergies and a valuation re-rating, marking a significant milestone in Sabesp's post-privatization strategy.
Strong Financial Position
Despite ongoing investments, Sabesp's adjusted EBITDA is on the rise, and the company maintains a robust balance sheet with substantial cash and financial investments. This financial strength supports continued growth and operational initiatives.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
SBS Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$33.50
52W Range Position
87%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$18.88
+77.4% from the low
52-Week High
$35.78
-6.4% from the high
1 Month
+10.67%
3 Month
+21.95%
YTD
+37.5%
1 Year
+69.0%
3Y CAGR
+53.1%
5Y CAGR
+35.5%
10Y CAGR
+16.3%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
SBS vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
3.4x
vs 18.0x median
-81% below peer median
Revenue Growth
+2.1%
vs +6.3% median
-67% below peer median
Net Margin
22.2%
vs 20.7% median
+7% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
SBS SBS Companhia de Saneamento Básico do Estado de São Paulo - SABESP | $23.5B | 3.4x | +2.1% | 22.2% | Hold | -29.0% |
AWK AWK American Water Works Company, Inc. | $24.6B | 20.7x | +6.3% | 21.2% | Hold | +6.8% |
CWT CWT California Water Service Group | $2.6B | 16.7x | +2.0% | 11.8% | Buy | +25.5% |
YOR YORW The York Water Company | $465M | 18.0x | +8.4% | — | Hold | — |
MSE MSEX Middlesex Water Company | $946M | 19.9x | +4.6% | 22.1% | Buy | +5.0% |
ART ARTNA Artesian Resources Corporation | $323M | 15.7x | +7.0% | 20.2% | Buy | — |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
SBS Dividend and Capital Return
SBS returns 2.4% total yield, led by a 2.05% dividend.
Dividend SustainableFCF Unknown
Total Shareholder Yield
2.4%
Dividend + buyback return per year
Buyback Yield
0.4%
Dividend Yield
2.05%
Payout Ratio
27.9%
How SBS Splits Its Return
Div 2.05%
Dividend 2.05%Buybacks 0.4%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$3.39
Growth Streak
Consecutive years of dividend increases
1Y
3Y Div CAGR
101.9%
5Y Div CAGR
41.6%
Ex-Dividend Date
—
Payment Cadence
Semi-Annual
2 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$466M
Estimated Shares Retired
14M
Approx. Share Reduction
2.0%
Shares Outstanding
Current diluted share count from the screening snapshot
684M
At 2.0%/year, buybacks mechanically lift EPS even with flat earnings — each remaining share represents a slightly larger piece of the company.
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $0.16 | — | — | — |
| 2025 | $1.12 | +440.5% | 2.9% | 17.1% |
| 2024 | $0.21 | -18.2% | 0.0% | 0.0% |
| 2023 | $0.25 | +86.2% | 0.0% | 0.0% |
| 2022 | $0.14 | +133.1% | 0.0% | 0.0% |
FAQ
7 questionsSBS Investor Questions
Common questions answered from live analyst data and company financials.
01Is Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) stock a buy or sell in 2026?
Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) is rated Hold by Wall Street analysts as of 2026. Of 7 analysts covering the stock, 2 rate it Buy or Strong Buy, 4 rate it Hold, and 1 rate it Sell or Strong Sell. The consensus 12-month price target is $24, implying -29.0% from the current price of $34. The bear case scenario is $94 and the bull case is $275.
02What is the SBS stock price target for 2026?
The Wall Street consensus price target for SBS is $24 based on 7 analyst estimates. The high-end target is $24 (-29.0% from today), and the low-end target is $24 (-29.0%). The base case model target is $204.
03Is Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) stock overvalued in 2026?
SBS trades at 3.4x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals significantly undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) stock in 2026?
The primary risks for SBS in 2026 are: (1) Regulatory Environment — SBS operates within a heavily regulated industry, and any changes in regulations or government policies can significantly impact its business operations and profitability. (2) Economic Conditions — The company's performance is closely tied to economic and political conditions in Brazil, as well as global economic trends. (3) Interest Rate Risk — Fluctuations in market interest rates can affect the cost of SBS's variable-rate debt, potentially leading to reduced net income. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Companhia de Saneamento Básico do Estado de São Paulo - SABESP's revenue and earnings forecast?
Analyst consensus estimates SBS will report consensus revenue of $38.1B (+2.1% year-over-year) and EPS of $12.96 (+6.9% year-over-year) for the upcoming fiscal year. The following year, analysts project $41.6B in revenue.
06When does Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) report its next earnings?
Companhia de Saneamento Básico do Estado de São Paulo - SABESP is expected to report its next earnings on approximately 2026-05-11. Consensus expects EPS of $0.35 and revenue of $1.3B. Over recent quarters, SBS has beaten EPS estimates 67% of the time.
07How much free cash flow does Companhia de Saneamento Básico do Estado de São Paulo - SABESP generate?
Companhia de Saneamento Básico do Estado de São Paulo - SABESP (SBS) had a free cash outflow of $726M in free cash flow over the trailing twelve months — a free cash flow margin of 1.9%. SBS returns capital to shareholders through dividends (2.0% yield) and share repurchases ($466M TTM).