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Investing.com - RBC Capital has reiterated its Outperform rating and EUR14.00 price target on EDP Renovaveis SA (ELI:EDPR:LI) (OTC:EDRVF), while adding the renewable energy company to its Global Energy Best Ideas List. According to InvestingPro data, the stock has shown strong momentum with an 11.84% return over the past six months.
The firm believes EDPR stock is currently trading at a discounted valuation based on installed capacity, primarily due to concerns about U.S. renewable energy regulations, which represent 50% of EDPR’s business. While RBC notes that the current regulatory framework does not appear unfavorable for the company, InvestingPro analysis shows the company maintains impressive gross profit margins of 78.35%, though it currently trades at elevated EBITDA and revenue multiples.
RBC Capital expects EDPR to deliver recurring earnings growth of 20% year-over-year in 2025, excluding asset rotation. This growth projection supports the firm’s continued bullish outlook on the stock. InvestingPro data reveals that analysts expect significant revenue growth of 31% this year, with the company projected to return to profitability. Get access to 10+ additional exclusive ProTips and comprehensive financial metrics with InvestingPro.
The investment bank also highlighted potential balance sheet improvements that could trigger significant share buybacks. These buybacks might be announced at EDPR’s upcoming Capital Markets Day scheduled for November 2025.
EDPR, a major player in the renewable energy sector, continues to expand its global footprint despite market concerns about regulatory environments in key markets like the United States.
In other recent news, Jefferies analysts have downgraded EDP Renovaveis SA’s stock rating from Buy to Hold, while also lowering the price target from €11.00 to €8.70. This change reflects concerns about the company’s balance sheet and the risks associated with its €3 billion asset rotation process. The analysts noted that the success of these asset sales, primarily expected to occur in the United States, is crucial for EDP Renovaveis’ efforts to reduce its debt. However, political and regulatory uncertainties in the U.S. regarding renewable assets present execution risks for these sales. The revised outlook from Jefferies highlights a more cautious perspective on the company’s financial health and future performance. The downgrade suggests that Jefferies no longer recommends purchasing the stock at its current valuation. These developments are now part of the broader analysis by the investment community concerning EDP Renovaveis’ shares.
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