IBDRY - Iberdrola: Resilient But British Concession Exposure Has Us Looking Elsewhere
Iberdrola (IBDSF) was a company which impressed us at March lows. The business was expected to be highly resilient due to its substantial regulatory exposures, and as a renewable generation company they were top of the line. Indeed, its resilience played out as we had expected in Q2. However, there are concerns with the recent developments with Ofgem, the British utilities regulator, which has put forward an official proposal to cut remuneration in half for British-regulated utilities, including Iberdrola’s ScottishPower. Among companies whose businesses have minimal volatility, this makes Iberdrola meaningfully less