Endesa SA

ELE: XMAD (ESP)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	€46.00	Zvqh	Myhxsjq

Endesa Exceeds Expectations in 2022; Dividend Higher Than Expected; Shares Cheap

Tancrede Fulop

Feb 24, 2023

We maintain our EUR 22.30 fair value estimate after no-moat Endesa released 2022 net income slightly above FactSet consensus and net debt above guidance. The firm intends to pay a EUR 1.59 dividend on 2022 results, 11% higher than 2021 and above EUR 1.5 guidance due to high 2022 net income. This implies a juicy yield of 8.6%. Due to the expected normalization of profits, the group guides for a 2023 dividend of EUR 1, implying a 5.4% yield. However, the group has been paying a higher dividend than planned for three years in a row. This could still be the case in 2023. Shares are undervalued.

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