Iberdrola: Improving Revenue Visibility Could Minimize Downside Risk

2026-02-28 03:43:40 ET

Back in March 2025, I published a bullish piece on Spanish renewable energy utility Iberdrola ( IBDRY ) ( IBDSF ) wherein I hinged my thesis on the company’s impressive bottom-line growth as well as the ongoing surge in electricity demand largely driven by the rapid buildout of AI data centers. To be fair, calling Iberdrola a Spanish utility is a bit misleading because this company looks very different from 20 years ago when it derived less than 5% of its revenue outside Spain; the company is now a bona fide global utility with 65% of its business in the U.K., U.S., France, Germany, Australia, and Brazil. Back then, U.S. President Donald Trump had just issued an executive order pausing new or renewed approvals for onshore or offshore wind projects on federal lands. That was before the One Big Beautiful Bill Act (OBBBA) (enacted July 4, 2025) further hamstrung the renewable energy sector by accelerating the phase-out of both production and investment tax credits, requiring projects to be in service by December 31, 2027 to qualify. Iberdrola is the global leader in wind energy, with ~23,600 MW installed wind capacity (onshore + offshore), and derives more than 40% of EBITDA from wind energy. Renewable energy accounts for ~86% of Iberdrola's electricity generation mix, with a total installed capacity of over 46,000 MW across wind, solar, and hydropower....

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