Citigroup maintained buy ratings on Argentine power producers Pampa Energia and Central Puerto, both classified as high-risk investments, as sector reforms drive earnings growth forecasts.
The bank kept its buy rating on Pampa Energia with a $121 per ADR price target, including a $6 contribution from the FertilPampa project. Analysts project Pampa’s EBITDA to rise 55% year-over-year to $1.6 billion in 2026, followed by a further increase to $1.9 billion in 2027. The company’s RDA oil production reached 22,000 barrels per day in May, with output expected to climb to 28,000 barrels per day by the fourth quarter.
Central Puerto also retained a buy rating, with a $22 per ADR target. Citi forecasts its EBITDA to grow 55% to $521 million by 2026, supported by strong second-quarter results and upward revisions to third-quarter pricing and margins. The firm noted that capital allocation, particularly toward oil and gas opportunities, could divert focus from Central Puerto’s core power business.
Citi suggested that a potential divestment of Central Puerto’s mining and forestry assets could enhance investor sentiment. The second-quarter earnings season underscored the impact of Argentina’s reform measures on organic earnings growth within the power generation sector.
