LatAm Utilities: Feedback from the US: Between macro headwinds and structural tailwinds

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LatAm Utilities: Feedback from the US: Between macro headwinds and structural tailwinds

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LatAm Utilities

Feedback from the US: Between macro

headwinds and structural tailwinds

Industry Overview

Meetings recap: macro noise, power prices and Argentina 19 May 2026

We hosted marketing meetings in the US and investor meetings with Copel last week. In Equity

broader discussions (ex-Copel investor meetings), investors turned more cautious Latin America

after recent sector weakness (global risk + political noise + mixed earnings), with focus Utilities

on: (i) macro vs fundamentals behind the sell-off, (ii) power prices, and (iii) lack of near- Gustavo Faria >>

term sector triggers. Argentina also came up, with strong fundamentals (especially in Research Analyst

energy) but still limited positioning due to macro risks. In the Copel investor Merrill+55 11Lynch2188 (Brazil)4295

meetings, discussions focused on: (i) the “all-around” model (regulated + power prices), gustavo.faria@bofa.com

and (ii) growth optionality. Andre Silveira >>

Research Analyst

Macro / sector lens: macro-driven sell-off reopens ERP Merrill+55 11Lynch2188 (Brazil)4476

Utilities have softened amid global risk repricing & higher political noise in Brazil. Despite andre.silveira@bofa.com

its defensive profile, the sector was not immune to outflows. We see the recent sell-off

(Utilities down 12% in 1M) as largely macro-driven, with fundamentals broadly intact.

ERP = Equity Risk PremiumThis has reopened the equity risk premium, now at 500bps vs long-term rates (vs 400bps

Quarter / 425bps 2026 avg), providing an attractive opportunity. Regionally, Argentina CvaR = Risk Aversion parameters on

stands out as a contrast – strong micro, but macro uncertainty still delaying flows.