Bernstein reduces EDP to 'market-perform' on lower power prices
** Bernstein downgrades Portuguese EDP EDP.LS to "market-perform" from "outperform" as it sees negative earnings momentum driven by lower power prices
** The broker expects power prices to stabilise, with likely some downward pressure this year, and supply margins to decline from the 2022/2023 highs due to competition from independent suppliers and the cap that the regulated tariff represents
** The companies are relatively "well hedged" for 2024/25 (with EDP to a lesser extent) with locked-in prices well above the current market prices, it points out
** However, the main impact from power prices is likely to come in 2026, with EDP as the most exposed, followed by Endesa ELE.MC and with Iberdrola IBE.MC the least exposed, the brokerage adds
** Bernstein stays "outperform" on Endesa due to the attractive multiples the Spanish company is trading at and solid earnings growth
** It remains "market-perform" on Iberdrola as although the firm is "ticking all the right boxes", the upside is limited in its view
Reporting by Matteo Allievi
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
