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Enel Lowers 2022-23 Guidance as Expected, Sets 2024 Guidance in Line With Ours; Shares Cheap

Tancrede Fulop, CFA Senior Equity Analyst

Analyst Note

| Tancrede Fulop, CFA |

We don't expect to materially change our EUR 8.40 fair value estimate after Enel held its annual capital markets day, during which it rolled over its three-year guidance and lowered its 2022 and 2023 targets due to lower foreign-exchange assumptions, in line with expectations, and set 2024 guidance roughly in line with ours. The company confirmed its 2021-23 dividends but unexpectedly set a flattish 2024 dividend versus 2023 to have more leeway to invest. In any case, the current dividend yield of 5.5% is attractive and well above the sector average of 4.2%, reflecting the undervaluation of the shares. 

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Company Profile

Business Description

Enel is a diversified energy company domiciled in Italy. Operations are concentrated in Italy, Spain, and Latin America. The firm's primary activities are electric generation, electric networks, and gas and electricity marketing. Around 50% of the company's EBITDA is derived from its regulated networks. Taking into account power sold through power purchase agreements in Latin America, around 70% of EBITDA is quasi-regulated. Enel is a giant in global power generation with 86 gigawatts of capacity, of which 39 GW is renewables, including a large share of hydro.

Viale Regina Margherita, 137
Rome, 00198, Italy
T +39 683054000
Sector Utilities
Industry Utilities - Diversified
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type
Employees 66,021