Reinitiating Coverage of EDP Renovaveis With No Moat and EUR 22 FVE; Raising EDP's FVE to EUR 6

We reinitiate coverage on EDP Renovaveis with a no-moat rating and fair value estimate of EUR 22, implying a price/fair value of 1.1. The overvaluation reflects too-upbeat expectations on capacity additions beyond 2025, in our view. On the other hand, valuing EDP Renovaveis with a net present value enables us to fully capture value of future projects—which leads us to increase our fair value estimate of parent company EDP by 20% to EUR 6 from EUR 5, involving a price/fair value of 0.83. All in all, buying EDP shares allows investors to get EDP Renovaveis at a discount.