Enel: Buyback And Cost Savings Not Priced In, Buy Confirmed

2025-05-15 07:08:36 ET

Summary

• Enel is deleveraging while increasing its EBITDA. 90% of 2025-27 EBITDA is secured, offering downside protection and earnings growth visibility.
• ENLAY offers downside risks thanks to a limited US exposure and almost no FX impact.
• Enel's valuation remains attractive compared to peers, with potential buybacks and cost reductions expected to drive further EPS and net income growth.

We were positively surprised by the quarter's strength and had expected Enel SpA ( ENLAY ) to revise its guidance upward. While that did not occur, we believe there is still upside potential for the stock. Having said that, since our last update (Q4 and FY 2024 – Net Profit Beat, Guidance Confirmed, Still A Buy ), Enel shares price increased by more than 12.02% (Fig. 1). In uncertain times, regulated players' investments usually pay off. However, we have a long-standing buy rating due to 1) a deleverage path , 2) Improved Capital Allocation , and 3) valuation discount vs peers. ...

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