Sabesp shares rise 15% amid improved water levels and tariff outlook

Sabesp (SBSP3) shares have seen a recovery of approximately 15.40% between August 20 and September 24, rebounding from a 7% drop following the company's second-quarter 2026 earnings report.

Analysts attribute this movement to two primary factors: a market correction regarding the initial negative reaction to increased expenses and improved hydrological conditions. Recent rainfall has helped recover levels in the Cantareira System, reducing perceived risks related to water supply, although the system remains in an alert phase.

Financial institutions have maintained positive outlooks on the company. Goldman Sachs views the current valuation as an entry opportunity, noting a potential tariff revision in December 2026 that could range from a 12% increase in a pessimistic scenario to 20% in an optimistic one. Additionally, JPMorgan raised its price target for Sabesp to R$ 35 for December 2027, while Itaú BBA and JPMorgan have reiterated buy recommendations.