Monday, August 8

Investors demand a sharper roadmap from Naturgy

The end of the takeover of IFM upon Naturgy has put an end to the uncertainty that surrounded the company, but investors continue to be reluctant to a company where the balances of power have to stabilize, and they demand more concreteness in its transition strategy towards renewable energies to position themselves clearly in their favor.

The company run by Francisco Reynés, with a market capitalization of 22,688 million euros, has raised its price per share by 3 percent to 23.6 euros during the trading session on Monday, but analysts see a growth potential of the same as at the moment it is very limited.

This is how Ángel Pérez, financial analyst at Rent 4, on its report on the long-term vision of three energy companies, Iberdrola, Endesa, and Naturgy, in which the latter loses out.

A scenario of opportunity, but without a clear roadmap

Pérez’s report points out that the current uncertain environment, with rises in the prices of raw materials and transport costs, and logistics bottlenecks, is a factor that continues to worry, pressuring prices at the same time as offer entry opportunity in some securities.

However, while the analyst considers that Endesa and Iberdrola offer an attractive long-term entry opportunity due to their solid investment plans for the next decade, he does not share that view regarding Naturgy.

“On Naturgy, whose plan to 2025 we value positively on a qualitative level, we consider that a bit more specificity is needed at a quantitative level, we believe that better entry levels should be expected to take positions after the rises in value with the end of the takeover process “, it states.

Naturgy presented in july your strategic plan to 2025 with investments of 14,000 million euros to boost its role in the energy transition. A five-year vision that the company recognized “was a pending issue and demanded by the financial markets.”

From Rent 4However, a mixed reading is made on the plan, arguing that it is made on the estimate that ebitda will grow by 7 percent to reach 4,800 million euros, a calculation that the financial institution reduces to 5 percent, arguing that “the lack of specificity” of Naturgy it leads them “to adopt a slightly more conservative stance” on their hypothesis.

Giving the stock an upwardly revised target price of 24.77 euros from Rent 4 claim to see “limited potential at our target price, so we would expect better entry levels”, despite the good performance of the price since the beginning of the year.

The target price set by Ángel Pérez Llamazares is the highest among the analysts who have issued their opinion on Naturgy, and even so, it coincides with more pessimistic judgments in the conclusion about what the company must do to seduce the markets.

Victor Peiro, director of analysis of GVC Gaesco Values, gives the share of the energy company a target price of 22 euros, and detailed in the market closing podcast that he expected the company to remain relatively trapped on the stock market.

“It is a company that in my opinion is a little out of date in terms of the energy transition in Spain,” said Peiro. “We before it was the opa of IFM We thought that this company had to accelerate a lot in two points: the sale of assets […] and renewables “.

Peiro regretted, however, that the company had not provided shareholders with much information while the tender process launched by the Australian fund lasted, a decision that he attributed to the necessary stabilization between the different power forces within its structure, once IFM it has now controlled 10.8 percent of the capital.

“In the results, it has been one of the few companies that has not presented a report as complete as it did before, but has only made a presentation,” Peiro explained.

Despite this, the director of analysis of GVC Gaesco Values showed his confidence that the new council structured after the entry of IFM it will resume activity around these lines of action, but predicted that it would be “in the medium term.”