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On Thursday, Citi analyst Antonella Bianchessi increased the price target for Endesa , S.A. (BME:ELE:SM) (OTC: ELEZY) to €20.30, up from the previous €19.50, while maintaining a Neutral stance on the stock. The adjustment reflects a comprehensive update to Endesa’s forecasts and valuation, taking into account several recent developments.
The revision follows Endesa’s acquisition of hydro assets from ANE, third-quarter financial results, insights from the company’s Capital Markets Day at the end of last year, and the latest interest rate and commodity price trends. Additionally, the price target now accounts for projections into FY25.
As a result of these updates, Citi’s earnings per share (EPS) forecasts for Endesa have increased by 10-17%. The new 12-month discounted cash flow (DCF)-based target price represents a 4% increase from the previous target. Despite the higher price target, Citi’s overall perspective on Endesa remains the same.
Endesa’s near-term earnings are expected to be supported by its inframarginal output, which benefits from the current level of power prices. However, Citi views this support as likely unsustainable over the long term. The firm’s rating continues to reflect a view that Endesa’s stock is fairly valued at present.
Investors and the market are now looking forward to regulatory decisions regarding the allowed rate of returns on power distribution networks and the outcomes of government auctions for non-island generation, which could influence Endesa’s financial performance in the future. Citi’s updated price target and rating provide a current snapshot of Endesa’s valuation and market expectations.
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