Enel shares hold Buy rating with EUR7.00 target from CFRA

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Enel shares hold Buy rating with EUR7.00 target from CFRA
Credit: © Reuters.

On Friday, CFRA maintained its Buy rating on Enel (BIT: ENEI ) SpA (ENEL:IM) (OTC: ENLAY), with a steady price target of EUR7.00. The firm's outlook is supported by Enel's 2023 EBITDA, which showed a 12% year-over-year increase to EUR22.0 billion, surpassing the consensus estimate of EUR21.7 billion. This performance was attributed to robust growth in the company's integrated business segment.

Enel's financial growth is aligned with its 2024-26 Strategic Plan, which forecasts a compound annual growth rate (CAGR) of 5% for EBITDA and 6% for net income from 2023-2026. The company's regulatory asset base (RAB) saw a 5% improvement, driving the expansion of its grid operations. Additionally, CFRA highlighted the potential for dividend growth starting in 2024, linked to asset sales in Peru and a clear dividend payout policy that could reach up to 70%.

The firm introduced its 2025 earnings per share (EPS) estimate for Enel at EUR0.66, reflecting confidence in Enel's future profitability. CFRA anticipates that the company will continue to exercise financial discipline and enhance cash generation through strategic disposals, which is expected to support a sustainable dividend.

The firm's positive stance on Enel is further reinforced by the company's potential for growth through the addition of renewable capacities. CFRA remains optimistic about Enel's earnings targets for the period from 2023 to 2026 and endorses the stock with a Buy recommendation.

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