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On Monday, Jefferies initiated coverage on Redeia Corp SA (RED:SM), Spain’s exclusive electricity transmission grid operator, with a Buy rating and a price target of EUR20.80. The firm’s analysts cited a positive outlook for the company’s growth, which they believe is currently undervalued by the market.
The coverage comes with an expectation that Redeia will significantly increase its capital expenditures to support Spain’s energy transition and enhance grid resiliency. This forecast is 13% higher than the consensus, particularly in light of recent events that have brought attention to the need for a more robust electricity infrastructure, such as the recent blackout.
Jefferies projects a compound annual growth rate (CAGR) of 9% in earnings per share (EPS) from fiscal year 2025 to 2030. This growth projection is supported by what the firm describes as Redeia’s resilient balance sheet.
The price target of EUR20.80 implies a total shareholder return (TSR) of 24%, indicating a robust potential upside for investors from the current market valuation. The initiation of coverage by Jefferies is expected to provide investors with a new perspective on the investment potential of Redeia in the context of Spain’s evolving energy sector.
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