Company Reports

EDP Renewables' recurring first-half EBITDA increased 8% year on year to EUR 1.03 billion, slightly above the company-compiled consensus. Recurring net profit increased 34%. The group tweaked 2026 EBITDA guidance to EUR 2.2 billion-EUR 2.3 billion from about EUR 2.2 billion.

In the first quarter, EDPR's recurring EBITDA increased 2% year on year to EUR 489 million, in line with company-compiled consensus. Recurring net profit grew by 9% to EUR 71 million, due to a lower cost of debt. The group tweaked 2026 EBITDA guidance from about EUR 2.1 billion to EUR 2.2 billion.

EDP Renovaveis is the 71%-owned subsidiary of integrated Portuguese utility EDP. With 20.4 gigawatts of installed capacity at end-2025, it is one of the largest renewable energy developers in the world and in the US. The latter accounts for nearly half of the capacity, Europe for about 30%, and the rest is located in South America and the Asia-Pacific.

EDPR reported fourth-quarter EBITDA ahead of guidance despite continued normalization in European power prices. However, EBITDA guidance of EUR 2.1 billion for 2026, at the lower end of the EUR 2.1 billion-EUR 2.2 billion range outlined at the November capital markets day, tempered market reaction.

EDP Renovaveis is the 71%-owned subsidiary of integrated Portuguese utility EDP. With 19.3 gigawatts of installed capacity at end-2024, it is one of the largest renewable energy developers in the world and in the US. The latter accounts for half of the capacity, Europe for 35%, and the rest is located in South America and the Asia-Pacific.

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.

EDP Renovaveis released its 2026-28 business plan, with 2028 targets a bit short of company-compiled consensus. The firm slashed its net investments by increasing asset rotation while increasing its US focus.

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

EDPR's EBITDA was flat in the first half, at EUR 948 million. Reported net profit tumbled by 56% because of the absence of capital gains.

EDP Renovaveis is the 71%-owned subsidiary of integrated Portuguese utility EDP. With 19.3 gigawatts of installed capacity at year-end 2024, it is one of the largest renewables developers in the world as well as in the US. The latter accounts for half of capacity, Europe for 35%, and the rest is located in South America and Asia-Pacific.

On July 1, 2025, the US Senate passed its version of the tax bill, with language tweaked to be more favorable toward renewable energy credits compared with the draft released over the previous weekend.

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

On May 12, the US House Ways and Means Committee released its budget reconciliation bill. The bill includes updates to key clean energy incentives established or extended under the Inflation Reduction Act.

EDPR's EBITDA grew by 5% in the first quarter, in line with the company-compiled consensus. The firm set its 2025 EBITDA guidance in line with the FactSet consensus but a tad below our estimate.

After rallying on April 3 together with government bonds, European utilities have been caught in the market rout since April 4.

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 cut our fair value estimate for EDP Renovaveis to EUR 13 per share from EUR 17 after the group released 2024 financial results well below the consensus polled by the company and our expectations, net debt well above our estimate, and a trim in its capacity additions target for 2025-26. The shares still look materially undervalued.

EDP Renovaveis is the 71%-owned subsidiary of integrated Portuguese utility EDP. With 16.6 gigawatts of installed capacity (mostly onshore wind) at year-end 2023, it is the fourth-largest renewables player in the world as well as in the US. The latter accounts for half of capacity, Europe for 36%, and the rest is located in South America and Asia-Pacific.

We confirm our GBX 970 fair value estimate after no-moat National Grid agreed to sell its US onshore renewable business to Brookfield for $1.74 billion, in line with our expectations. Completion is expected in the first half of National Grid's fiscal 2026. We view shares as fairly valued. The deal price reflects that renewables firms with US exposure like EDP Renovaveis have excessively sold off. It's consistent with recent statements by Brookfield's President Connor Teskey about the bright outlook of renewables in the US on the back of data-center-driven electricity consumption growth and large opportunities offered by the discrepancy between public and private valuations for renewables.

We confirm our EUR 17 fair value estimate after no-moat EDP Renovaveis released nine-month results in line with expectations and cut its 2024 output guidance. Shares are down after the Donald Trump victory and the Republican Party regained control of the Senate in the Nov. 5 US election. EDPR plans to dedicate nearly half of its 2024-26 investments to the US. A phase out of the Inflation Reduction Act's tax credits for wind and solar plants would hit the returns of future projects and could lead EDPR to trim its investments. The valuation impact of this would not be meaningful and appears excessively priced in.