Endesa SA

ELE: XMAD (ESP)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	€12.00	Rpbns	Fbzqblbd

Endesa Earnings: Working Capital Finally Improved and 2023 Guidance Maintained; Shares Undervalued

Tancrede Fulop

Jul 26, 2023

We retain our EUR 22.30 fair value estimate after no-moat Endesa reported good first-half results and conservatively confirmed its 2023 guidance. Shares have been sold off after left-wing parties did better than expected at the Spanish general elections in July 2023, implying the possibility that they could keep control of the parliament. Still, our long-term estimates are based on conservative power price assumptions of EUR 60 per megawatt-hour, meaning that an extension of the EUR 67/MWh clawback on hydro and power producers would have no impact. Shares are undervalued.

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