Companhia Energética de Minas Gerais - CEMIG

AI-generated fair value estimate for this company.

Method: Justified price-to-book model: $1.97 book value per ADR share; 15.94% return on equity; 13% cost of equity (Brazil sovereign/regulatory risk premium for a state-linked utility); 5% sustainable long-run growth (Brazilian inflation-linked tariff escalation). Justified P/B = (0.1594-0.05)/(0.13-0.05) = 1.368x; intrinsic value = 1.368 x $1.97 = $2.69 per ADR.

Reasoning: CEMIG is a regulated Brazilian electric utility (generation, transmission, distribution) whose cash flows are tariff-regulated and inflation-indexed, making a book-value/ROE-based model more robust to BRL volatility and regulatory reset risk than a USD-denominated FCF DCF; the elevated discount rate reflects Brazilian sovereign and currency risk for ADR holders.