Endesa SA

ELE: XMAD (ESP)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	€68.00	Xztmh	Spyphfqq

Endesa: Cuts Short-Term Guidance; Sets 2026 in Line With Our Estimates; Shares Undervalued

Tancrede Fulop

Nov 23, 2023

No-moat Endesa held its annual capital markets day. In line with parent company Enel on Nov. 22, Endesa announced that it aims to be free cash flow-positive over 2024-26 whereas the previous 2023-25 plan involved releveraging the firm. This strategic shift from the new top management of Enel looks sensible to us against a backdrop of high interest rates. On the downside, the firm unexpectedly cut its 2023 earnings guidance after confirming it on Oct. 31. Endesa also trimmed its 2024 earnings and dividend guidance while setting its 2026 guidance in line with our estimate. All in all, we confirm our EUR 22.30 fair value estimate and see the shares as undervalued.

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