Company Reports

On Oct. 16, Italy and the European Commission agreed to cap gas prices for gas-fired power plants at EUR 59 per megawatt-hour, at the upper end of the EUR 55-EUR 60/MWh range in press reports. The goal is to lower power prices, as combined-cycle gas turbine plants set them much of the time in Italy.

Enel, 24% owned by the Italian government, is the largest European utility in terms of earnings. It is an integrated utility operating mainly in Italy, Spain through its subsidiary Endesa, and in Latin America. The grid business accounts for around 35% of the earnings. The rest comes from generation and supply. The power generation mix is dominated by renewables, with hydro, solar, and wind accounting for two-thirds of its capacity.

Enel's first-half EBITDA increased by 3% to EUR 11.8 billion. In the second quarter, it grew by 6%. Net income increased by 3% to EUR 3.29 billion, 5% above the company's compiled consensus. The group said that it is confident of achieving the high end of the EUR 0.72-0.76 2026 EPS guidance.

Enel's first-quarter EBITDA was flat at EUR 6 billion. Net income decreased by 3% to EUR 1.94 billion, in line with the company's compiled consensus. The group confirmed its 2026 guidance, including net income in the EUR 7.1 billion-EUR 7.3 billion range.

Enel is the largest European utility in terms of earnings. The Italian government owns 24% of it. It is an integrated utility operating mainly in Italy, Spain through its subsidiary Endesa, and in Latin America. The grid business accounts for around 35% of the earnings. The rest comes from generation and supply. The power generation mix is dominated by renewables, with hydro, solar, and wind accounting for two-thirds of its capacity.

Enel announced a massive step-up in renewables investments, EUR 1 billion additional share buyback, and annual dividend growth through 2028 in its 2026-28 business plan. Shares are up by 7% at the time of writing.

On Feb. 18, Italy approved a decree to reimburse gas-fired plants for carbon costs. As combined-cycle gas turbines set marginal prices, the measure would remove carbon-cost pass-through from wholesale power prices, thereby lowering electricity bills.

Enel released its preliminary 2025 figures. Full-year EBITDA was flat at EUR 22.9 billion. At constant scope, it increased 2%. The firm indicates that ordinary income is expected to be slightly above the EUR 6.7 billion-EUR 6.9 billion guidance range indicated last November.

The European utilities sector increased by nearly 8% since the end of September, outperforming the market by 5% due to stabilizing interest rates, solid third-quarter results, and hopes that artificial intelligence growth will boost electricity consumption in Europe.

Nine-month EBITDA decreased by 1%, slightly improving from a 2% decline in the first half, due to flat performance in the third quarter. Net ordinary income decreased 2%. Enel guides for 2025 net income slightly above the EUR 6.7 billion-EUR 6.9 billion guidance range, versus the top of it before.

Enel is an integrated utility operating mainly in Italy, Spain, and Latin America. The grid business accounts for 35% of the group's earnings. The rest comes from generation and supply. The power generation mix is dominated by renewables, with hydro weighing 34% of the installed capacity, and solar and wind at 35%.

European utilities shares decreased by 3% since the end of June, underperforming the market by about 6%.

First-half EBITDA decreased by 2% because of a negative scope effect, in line with the first quarter. Net ordinary income decreased by 3%, improving from an 8% fall in the first quarter and exceeding the company-compiled consensus by 5%.

European utilities rose by 12% in the second quarter, outperforming the market by 10%.

First-quarter EBITDA decreased by 2% because of a negative scope effect. Renewables investments tumbled. 2025 guidance was confirmed.

Enel is an integrated utility operating mainly in Italy, Spain, and Latin America. The grid business accounts for 35% of the group's earnings. The rest comes from generation and supply. The power generation mix is dominated by renewables with hydro weighing 34% of the installed capacity, and solar and wind at 35%.

European utilities increased by about 10% in the first quarter of 2025 thanks to good full-year results, attractive shareholder remuneration, and limited exposure to US tariffs. The latter was key in the material outperformance of the sector.

We confirm our EUR 7.50 fair value estimate after no-moat Enel released 2024 results slightly above the consensus it polled on the bottom line and confirmed its 2025 targets. It will pay a 2024 dividend of EUR 0.47, slightly above guidance of EUR 0.46, 9% above last year and involving an attractive dividend yield of 6.7%. Shares appear slightly undervalued.

We confirm our EUR 7.50 fair value estimate after no-moat Enel released 2025-27 financial targets, including a material increase in grid investments, for the second year in a row and in line with peers. 2025 and 2027 earnings targets are set slightly above our estimates, but the valuation impact is offset by the increase in investments. The firm will pay a 2024 dividend of EUR 0.46, 7% above 2023 and implying a juicy 6.8% yield. The dividend floor is set at EUR 0.46 through 2027, up from EUR 0.43 in the 2024-26 plan. Enel maintains potential dividend upside up to a 70% payout, but removes the attached condition of cash flow neutrality.

We confirm our fair value estimates for no-moat Acciona Energia and Endesa of EUR 25 and EUR 20, respectively, after the latter agreed to buy the bulk of the remaining Spanish hydro assets of the former for EUR 1 billion. The transaction is expected to close in the first half of 2025 upon antitrust and foreign investment clearances since Endesa is a subsidiary of Enel. Acciona Energia appears undervalued while Endesa looks fairly valued.