Enel Chile Is Fairly Valued, After A Record 2024 That Is Challenging To Repeat

2025-03-22 08:26:07 ET

Summary

• Enel Chile's 2024 results met expectations, driven by stable pricing, strong cash flows, and favorable hydrology, despite a $100 million storm-related settlement.
• The company reaffirmed its 2027 net income targets of $500–700 million, implying an 11–15% earnings yield on current market cap, maintaining a Buy rating.
• Hydrology reversion and reliance on cheaper Argentinian gas will impact future profitability, with increased capex in battery storage projects to offset hydro generation declines.
• An accounting change to USD functional currency affected Q4 earnings, but future FX impacts should be mitigated by continued hedging strategies.

Enel Chile ( ENIC ) reported 4Q24 results that were broadly in line with expectations, concluding a positive year marked by stable pricing, strong cash flows, and favorable hydrology conditions. The company made an accounting change to its functional currency Q4 that affected accrual earnings and warrants explanation....

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