On Monday, Citi analyst Jenny Ping revised the price target for Acciona Energia (ANE:SM) to €19.80, a decrease from the previous target of €22.00, while maintaining a Neutral rating on the company's stock. The adjustment comes amid concerns over the current interest rate environment, policy uncertainties for wind energy in the United States, and Acciona Energia's ongoing efforts to sell assets to improve its financial position.
Ping noted that Acciona Energia's equity story is affected by several factors that contribute to a lack of clarity for investors. Specifically, the company's valuation does not seem to account for anticipated future growth, and the stock's liquidity remains low. Despite some potential for valuation upside, Ping sees limited opportunities for a stock re-rating in the near future.
The analyst's report reflects a range of considerations, including Acciona Energia's recent disposal of its hydroelectric portfolio to Endesa (BME:ELE), the company's nine-month trading statement, and the prevailing interest rate and commodity price environment. The updated estimates take into account these factors without significantly altering the earnings per share (EPS) forecast for fiscal year 2024.
However, the EPS estimate for fiscal year 2025 is materially higher, factoring in expected capital gains from the sale of the hydroelectric assets. Conversely, the estimate for fiscal year 2026 is lower due to the anticipated full-year deconsolidation of earnings from the hydro fleet.
In conclusion, the sum-of-the-parts (SOTP) based target price for Acciona Energia now stands at €19.8 per share, as the company continues to navigate through a challenging financial landscape with a focus on asset sales and balance sheet management.
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