Enel Posts a Strong Finish to 2022; Shares Undervalued

We maintain our EUR 7.20 fair value estimate after no-moat Enel released 2022 preliminary results including EBITDA above FactSet consensus, but in line with our expectations. Net debt was strongly reduced in the fourth quarter, as we expected. This is positive for the equity story as ballooning net debt over the first nine months of the year while interest rates were soaring had fueled market jitters. The dividend yield of 8% reflects that the shares are still undervalued after their rally, driven by the stabilization of Italian government bond yields since last October.