A2A shares fall 6% after strategic plan reveals weaker near-term guidance

Investing.com -- Shares of Italian utility A2A SpA (BIT:A2) fell over 6% on Wednesday after the company’s updated strategic plan showed near-term earnings guidance slightly below market expectations, even as longer-term projections were raised.

A2A maintained its 2025 outlook at the upper end of its previous range, guiding for €2.2 billion in ordinary EBITDA and €700 million in net income. 

Both figures were in line with Bloomberg consensus estimates, which analysts described as a neutral component of the plan.

The company’s 2026 forecast reflected a mild shortfall. Ordinary EBITDA was guided between €2.21 billion and €2.25 billion, broadly consistent with the consensus of €2.24 billion, while net income of €630 million to €660 million was about 5% lower than consensus expectations of €682 million. 

Morgan Stanley in a note said, “we see downward pressure on street estimates for 2026 and view this as a small negative within today’s release. .”

Longer-term projections were stronger. The 2028 guidance was “essentially the reverse” of 2026, the brokerage said, showing ordinary EBITDA in line with consensus but net income about 5% higher. 

A2A forecast ordinary EBITDA of €2.4 billion and net income of €700 million for 2028.

The 2030 targets were raised more substantially. A2A projected ordinary EBITDA of €2.8 billion, 10% above the previous plan and ahead of consensus at €2.6 billion. 

Net income was guided at more than €800 million, roughly 12% higher than the €700 million consensus. Morgan Stanley described the 2030 guidance as “positive but long dated and will be interpreted as lower quality by the market, we expect.”

For 2035, the company projected ordinary EBITDA of €3.6 billion, up from €3.3 billion in the prior plan, and net income above €1.1 billion, compared with a previous goal of more than €1 billion.

A2A confirmed its dividend policy of “at least 4% per year growth.” Capital expenditures were revised upward to €23 billion over 2024-2035, compared with €22 billion in the earlier plan. 

The company said its net financial position to EBITDA ratio would not exceed 2.8x, slightly higher than the previous ceiling of 2.7x.

Morgan Stanley noted that the 2025 and 2026 outlooks “are where we expect the market to focus this morning, hence the small net negative,” while adding that the upgraded 2030 and 2035 targets represent “longer-term positives.” 

The brokerage described the overall update as a “mixed bag” of results, reflecting near-term neutrality and longer-term improvement.

The report also showed A2A’s 2025 segment guidance, including €1.2 billion in EBITDA from energy operations, €500 million from smart infrastructure, and €600 million from the circular economy business.

The brokerage noted that the plan shows direction “of travel directly vs last plan guide, with 2030 earnings upgraded vs last November.”