ELCPF - Energias de Portugal: Focus On Deleveraging Could Benefit Stock
2024-05-03 08:13:23 ET
Summary
- Lower electricity prices will start having some impact on PPAs. Markets might be hoping for a slower expansion of renewable assets to focus on deleveraging.
- Significantly undervalued compared to peers despite hydro optionality in a lower electricity price environment.
- EDP is a deleveraging and dividend return angle, with also hedged volumes and optionality in assets to achieve net income growth.
- Including asset rotations from after the closing date, the increase in leverage was modest considering major minority buyouts conducted in the year.
- We think the combined multiple, deleveraging and asset optionality case makes the proposition compelling at EDP's compressed stock price.
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Energias de Portugal: Focus On Deleveraging Could Benefit Stock