ELEZF - Endesa Hit Meaningfully By Spanish Shock Plan But We Hold For Now
- Endesa is currently one of our holdings due to its great dividend yield and relatively low multiple thanks to nuclear exposures.
- We still believe that Endesa is being excessively punished for nuclear, as most of its facilities will be in operation for another 10 years, despite the 5x multiple of provisions/EBITDA.
- The bigger issue for the stock now is the Spanish 'shock' plan, and it evidences the main Endesa risk, as well as any other Spain-exposed stock.
- Its EBITDA will probably be hit by 10% for the next two years, with the risk of further CNMC initiatives that could hurt Endesa.
- Nonetheless, we hold at a loss due to our position being limited, the dividend remaining attractive after a likely cut, and the transitory nature of this issue.
For further details see:
Endesa Hit Meaningfully By Spanish Shock Plan But We Hold For Now