The Diplomat
Iberdrola shares reached a new all-time high on the stock market yesterday, after rising 0.48% in the session and closing at a price of 12.6 euros per share, which takes the energy company to exceed for the first time a capitalisation of 80 billion euros at the end of a trading day.
The shares of the group chaired by Ignacio Sánchez Galán continued on Thursday with the upward stock market spiral in which they have been immersed since the end of July. At that time, the company presented earnings of 4,134 million euros in the first half of the year, 64% more than in the same period of 2023, and pointed to record earnings for the whole of 2024, which has led to a rise since 24 July of more than 5% on the stock market, also driven by the agreement for the acquisition of the British company Electricity North West (ENW) reached at the beginning of August.
The 12.60 euros per share achieved at the end of the trading session allowed the energy company to reach a new high at the end of the trading day, after the 12.55 euros it reached at the end of last Monday.
With a capitalisation of more than 80,190 million euros, Iberdrola has consolidated its position as the most valuable company in the sector in Europe and one of the three largest in the world, with a value greater than all the energy companies on the Ibex combined, reports Europa Press.
On 2 August, Iberdrola agreed to purchase ENW for a total of 5 billion euros – including debt -. The results presented at the end of the first half of the year have also contributed to this good performance. In addition, the company expects its recurring net profit to grow at a double-digit rate -10% or more- this year, compared to the high single-digit growth forecast in the first quarter.
The ENW acquisition also allows the company to make the UK its number one country by network asset base with around EUR 14 billion, followed by the US with EUR 13.3 billion.
This operation has been unanimously applauded by analysts. Goldman Sachs considered that ‘the transaction is a valuation positive for the sector, given the valuation discount we see in the UK regulated networks’, while Exane BNP Paribas noted that ‘the deal is reasonably priced and there is a clear strategic fit with potential benefits from synergies’.
‘These companies have already been performing well over the last few months, the capitalisation highs confirm investor confidence. Despite the turbulence in the energy sector, Iberdrola has managed to stay close to its highs, a large part of this situation is due to the change in its investment strategy’, says Joaquín Robles, market analyst.
Robles also points out that the rise in interest rates and the fall in energy prices ‘caused it to limit investment in renewables to projects already underway or to the most profitable ones. Most of the investment now goes to electricity grids, which provide more stable and predictable income. These assets are typically indexed to the cost of debt and inflation. Until 2026, 60% of its financing will go to grids and after its exit in Mexico it is looking to grow in consolidated markets such as the United States and the United Kingdom.
