Naturgy Energy Group SA

NTGY: XMAD (ESP)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	€58.80	Xwhx	Sjssxsbc

Naturgy: Termination of Takeover Discussions Offers an Entry Point

Tancrede Fulop

Jun 12, 2024

We confirm our EUR 25.70 fair value estimate for no-moat Naturgy after CriteriaCaixa, which owns 27% of Naturgy shares said on June 10 that it terminated discussions with Abu Dhabi's power and water utility Taqa that started in April. Taqa was seeking to acquire stakes of Naturgy's main shareholders to launch a full takeover bid. The announcement of the end of discussions sent shares down by 14%, namely to their depressed level of last April before the discussions started. The undervaluation of the shares is evidenced by a dividend yield of 6.6% and a 2024 P/E of 11.6.

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