Company Reports

EDP's recurring first-half EBITDA increased by 5%, sharply improving from the first-quarter's 3% fall. Recurring net profit was flat. The group raised its 2026 guidance for EBITDA to about EUR 5.3 billion from EUR 5.2 billion and for recurring net income to EUR 1.4 billion from EUR 1.3 billion.

EDP's recurring first-quarter EBITDA fell 3% and recurring net profit fell 9% to EUR 0.4 billion. The group raised guidance for EBITDA to EUR 5.2 billion from EUR 4.9 billion-EUR 5 billion and for recurring net income to EUR 1.3 billion from EUR 1.2 billion-EUR 1.3 billion, in line with our outlook.

EDP is an integrated utility whose 60% of EBITDA comes from renewable power, consisting of EDP Renováveis’ wind and solar assets, chiefly located in the United States and Iberia, and EDP’s hydropower assets in Iberia and Brazil. Renewables are the primary growth driver, driven by the commissioning of new capacity. As one of the largest renewables players in the US through EDP Renovaveis, EDP is well-positioned to benefit from data centers' demand for renewable power, which is driving up power purchase agreement prices.

EDP reported fourth-quarter recurring EBITDA of EUR 1.3 billion and net income of EUR 306 million, both ahead of company-compiled consensus and guidance. The firm will pay a EUR 0.205 dividend on 2025 results, above the EUR 0.20 floor that was paid on 2024 results. 2026 targets were reaffirmed.

EDP is the European integrated utility with the most significant renewable weighting, accounting for around 60% of the group's EBITDA. They consist of EDP Renovaveis’ wind and solar assets, chiefly located in the United States and Iberia, and EDP’s hydropower assets in Iberia and Brazil. Renewables are the primary growth driver, driven by the commissioning of new capacity. As the fourth-largest renewables player in the US through EDP Renovaveis, EDP is well-positioned to benefit from data centers' demand for renewable power, which is driving up power purchase agreement prices.

EDP is the European integrated utility with the most significant renewable weighting, accounting for around 60% of the group's EBITDA. They consist of EDP Renovaveis’ wind and solar assets, chiefly located in the United States and Iberia, and EDP’s hydropower assets in Iberia and Brazil. Renewables are the primary growth driver, driven by the commissioning of new capacity. As the fourth-largest renewables player in the US through EDP Renovaveis, EDP is well-positioned to benefit from data centers' demand for renewable power, which is driving up power purchase agreement prices.

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.

European electricity prices for households and industry are well above those in China, the US, and pre-energy-crisis levels. The gap is set to endure, as network costs and levies continue to increase.

EDP released its 2026-28 business plan with 2028 targets short of company-compiled consensus and ours on the bottom line. Emulating peers, the firm flipped its investments from renewables to networks.

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

EDP is the European integrated utility with the largest weight of renewables, accounting for around 60% of the group's EBITDA. They consist of EDP Renovaveis’ wind and solar assets chiefly located in the United States and Iberia and EDP’s hydropower assets in Iberia and Brazil. Renewables are the main growth driver due to the commissioning of new capacity. As the fourth-largest renewables player in the US through EDP Renovaveis, EDP is well positioned to benefit from the Inflation Reduction Act.

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

Recurring net profit grew by 19% in the first quarter. The group set its 2025 guidance in line with our and FactSet consensus expectations.

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.

EDP released 2024 results above expectations and confirmed its 2026 net income guidance. The reduction in our fair value estimate for subsidiary EDPR to EUR 13 from EUR 17 drives a reduction in our fair value estimate for EDP to EUR 4.60 from EUR 5. This implies a 2025 price/earnings of 10.6 that reflects the material undervaluation of the shares. In addition, the firm will pay a EUR 0.20 dividend on 2024 results, above the EUR 0.195 previously guided. This is a juicy 6.5% yield and a massive premium of 360 basis points to the Portuguese 10-year bond yield.

EDP is the European integrated utility with the largest weight of renewables, accounting for 60% of the group's EBITDA. They consist of EDP Renovaveis’ wind and solar assets chiefly located in the United States and Iberia and EDP’s hydropower assets in Iberia and Brazil. Renewables are the main growth driver due to the commissioning of new capacity. As the fourth-largest renewables player in the US through EDP Renovaveis, EDP is well positioned to benefit from the Inflation Reduction Act.

We confirm our EUR 5 fair value estimate after no-moat EDP released nine-month results above the company-compiled consensus and the management said that it is on track to deliver at least the 2024 guidance. Shares are materially undervalued. Its 2024 P/E of 12 and dividend yield of 5.1% (120 basis points above the Portuguese 10-year bond yield) reflect the material undervaluation of the shares.

EDP is the European integrated utility with the largest weight of renewables, accounting for 60% of the group's EBITDA. They consist of EDP Renovaveis’ wind and solar assets chiefly located in the United States and Iberia and EDP’s hydropower assets in Iberia and Brazil. Renewables are the main growth driver due to the commissioning of new capacity. As the fourth-largest renewables player in the US through EDP Renovaveis, EDP is well positioned to benefit from the Inflation Reduction Act.

While wholesale power prices stabilized, government bonds’ yields fell on weak economic indicators and lower inflation in the US and Europe. Second-quarter results were boosted by very favorable hydro conditions that led to some guidance upgrades. This goldilocks scenario bolstered a rally in European utilities, enabling them to massively outperform the market and recover much of their earlier underperformance.

We confirm our EUR 5 fair value estimate after no-moat EDP released first-quarter results slightly above FactSet consensus and sharply improving from the first quarter and confirmed its 2024 guidance. Its 2024 P/E of 12 and dividend yield of 5.1% (120 basis points above the Portuguese 10-year bond yield) reflect the material undervaluation of the shares.