Iberdrola Erases The Losses Due To Decree On The Stock Market

The group chaired by Ignacio Sánchez Galán , which has risen by around 6% in the last three sessions and has rebounded by 19% from lows of the year, has been the first to erase the losses on the stock market as a result of the decree approved by the Government on last September 14.


“We believe that the perception of regulatory risk in Spain is decreasing, as recent events have shown that the government will have to cooperate with utilities to stabilize the electricity market in the long term,” Citi experts explained in a report this Thursday .


Along the same lines, JB Capital Markets believes that the new series of measures is a positive development, “although expected”, for the sector. “This supports our view that regulatory risk on Spanish power companies is shrinking, which underpins our bullish view for stocks like Iberdrola (which continues to be our preferred vehicle to play this recovery), Endesa and EDP .”


In this new context, 21 analysis firms have revised their valuation since Wednesday, of which fifteen have reiterated their target price , five have increased it and only one, Bankinter, has lowered it by 3%. Despite this, this entity, like Citi, have changed their mind and now recommend acquiring their titles compared to maintaining the previous one.


“After the fall in the price of the share in the year and the greater clarity in the face of some of these uncertainties, the attractiveness of the share improves,” says Aránzazu Bueno, an analyst at the orange entity. “The group is a winner in the process of greater electrification and rapid decarbonisation faced by the new energy model,” he adds.


As for Citi, this last house is the one that has improved its target price the most after hearing the latest news, rising to 11 euros compared to the previous 9.2 euros .


“Iberdrola is well positioned to benefit from growing expectations about energy prices in the long term.


The higher cash flow, starting in 2022, together with the expected delay in the execution of the investment plan, should give a respite to Meanwhile, the development of the PPA market in Europe , and in particular in Spain, should improve income visibility. Exposure to assets covered by inflation and the strength of the British pound and the US dollar reinforce the valuation “, explain its analysts.


Barclays sees it at 14 euros

However, the most optimistic house continues to be Barclays, which sees the company’s shares at 14 euros for the coming months and whose conquest would mean reaching new all-time highs, compared to 11.59 euros at which the company values ​​it. average of the consensus that FactSet collects and that at current prices represents an upward potential of 13%. Iberdrola recovered the buy cartel last September in the midst of a stock market crash and has the best recommendation in the Spanish industry.

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