J.P. Morgan LatAm FTM 18 May 26 Brazilian Utilities; Bancolombia; Kimberly Clark Mexico; The J.P. Morgan View; Global Data Watch and More

Research evidence excerpt

J.P. Morgan LatAm FTM 18 May 26 Brazilian Utilities; Bancolombia; Kimberly Clark Mexico; The J.P. Morgan View; Global Data Watch and More

Latin America Equity Research

LatAm First to Market 18 May 2026

Top Stories

| Brazilian Utilities (Arthur Pereira, CFA)

Risk: Neither too little, Nor too much

The recent selloff in Utilities stocks (-12% in past 30 days) has reshuffled risk premia in the sector and we now see fast-growing

quality names no longer with demanding valuations (Figure 7 ImpliedInternalRateofReturns(IRs)). In this scenario, we think investors should avoid either:

1) too-defensive: CPFE’s tight valuation despite lower expected yields looks unjustified, reason why we downgrade CPFE to

Neutral, and 2) too-risky: risk-taking on high uncertainty theses like SAPR is less likely as long as high-quality names trade at

300-400bp ERP (in-line with SAPR’s base-case).

Bancolombia (Yuri R Fernandes)

Higher Rates and Margins, but CoR Should Also Go Up — Incorporating Post-1Q26 Guidance

We update our Cibest/Bancolombia model post-1Q26 results (see report here), incorporating new guidance reflecting higher

margins but also higher cost of risk and the Banistmo sale in 2H26. We now forecast COP 7.35 trillion, or 19.5% ROE, at the

low end of the company's 19.5–20% ROE guidance. We are now 1.5% below consensus in 2026 but 3% above in 2027.

Consequently, we also update our Dec-26 PT to US$ 70 per ADR, from previous US$ 65 per ADR, now offering 11% upside

potential.

Kimberly Clark Mexico (Joseph Giordano) (KIMBERA MM, N, PT Ps40.00)

Better Near-Term Margin Setup, but Core Looks Priced In With Oil-Derivative Related Risks

Increasing - Remain N

Kimberly Clark Mexico (KCM) remains a margin-led story with an improved near-term setup. Still, we remain Neutral seeing the