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1. Company Snapshot

1.a. Company Description

Endesa, S.A. engages in the generation, distribution, and sale of electricity primarily in Spain and Portugal.The company generates electricity from various energy sources, such as hydroelectric, nuclear, thermal, wind, and solar.As of December 31, 2021, it distributed electricity to approximately 21 million customers covering a total area of approximately 195,794 square kilometers.


The company's distribution and transmission networks consist of 316,506 kilometers.It also sells energy, as well as provides energy related commercial services.In addition, the company engages in installation, maintenance, and repair of home electrical, heating, and air conditioning; trading operations; and investment holding business.


Further, it is involved in the supply of electricity and gas to other European markets, including Germany, France, and the Netherlands.Additionally, the company engages in the electric mobility, demand management, and energy storage; exploitation of primary energy resources; provision of industrial services in the areas of telecommunications, water, and gas; electricity transmission business; management, operation, and administration of nuclear plants; issuance of debt instruments; and provision of consultancy and civil engineering services.The company was formerly known as Empresa Nacional de Electricidad, S.A. and changed its name to Endesa, S.A. in June 1997.


The company was incorporated in 1944 and is headquartered in Madrid, Spain.Endesa, S.A. is a subsidiary of ENEL Iberia, S.L.U.

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1.b. Last Insights on ELE

Endesa's recent performance has been influenced by subtle shifts in investor sentiment. The company's valuation has been under scrutiny as investors reassess its long-term direction, which is largely dependent on regulatory trends and energy market dynamics. Recent transactions in own shares, such as the ones reported on October 13 and 15, 2025, may indicate a strategic effort to optimize its capital structure. With no major events or announcements, Endesa's quiet period may be sparking curiosity about underlying changes in investor sentiment.

1.c. Company Highlights

2. Endesa's 9M 2025 Earnings: Strong Performance and Resilient Business Model

Endesa's 9M 2025 financial performance was robust, with EBITDA reaching EUR 4.2 billion, a 9% increase year-on-year, driven by the removal of the extraordinary levy and an 8% increase in generation and supply EBITDA. Net income came in at EUR 1.7 billion, up 22% versus last year. Earnings per share (EPS) was 0.585, in line with analyst estimates. The company's cash generation remained strong, with Funds From Operations (FFO) rising to EUR 3.4 billion, a 29% increase year-on-year.

Publication Date: Oct -30

📋 Highlights
  • EBITDA Growth:: EBITDA reached EUR 4.2 billion, a 9% year-on-year increase driven by the removal of the extraordinary levy and an 8% rise in generation and supply EBITDA.
  • Net Income Surge:: Net income rose to EUR 1.7 billion, up 22% year-on-year, with a net ordinary income to EBITDA conversion ratio of 41%.
  • FFO Expansion:: Free cash flow (FFO) hit EUR 3.4 billion, a 29% year-on-year increase, reflecting strong cash generation despite market challenges.
  • Share Buybacks:: The company has EUR 5 billion in potential firepower for buybacks, with the third tranche of the program launched, targeting a net debt/EBITDA ratio of 2.5x-3x.
  • Guidance Confidence:: Full-year guidance top-end is achievable, requiring only EUR 300 million net income in Q4, compared to EUR 600 million in the same period last year.

Operational Highlights

The company's operational performance was also notable, with an integrated unitary margin standing at EUR 53 megawatt hour, reflecting the effectiveness of its strategy focused on customer value over volume. The supply margin remained nearly flat, underscoring the company's ability to maintain its pricing power. As José Gálvez, CEO, mentioned, "the solid delivery across all business areas reaffirm our confidence in achieving the top end of the full year guidance."

Valuation and Outlook

Endesa's current valuation metrics indicate a Price-to-Earnings (P/E) ratio of 15.19, a Price-to-Book (P/B) ratio of 3.91, and an EV/EBITDA ratio of 8.16. The company's dividend yield stands at 4.29%, providing a relatively attractive return for investors. Analysts estimate next year's revenue growth at -1.0%, indicating a potential slowdown. However, Endesa's resilient business model and strong cash generation capabilities should help navigate the challenging market context.

Regulatory Environment and Future Plans

The company's management highlighted the need for a clearer and more predictable regulatory framework for distribution remuneration. Marco Palermo, CFO, mentioned that the current distribution remuneration framework "does not provide adequate support and incentives for the investment effort required by the National Energy Plan." Endesa is expected to continue investing in the system, with a potential increase in network CapEx if the regulatory package is favorable.

Share Buyback and M&A Opportunities

Endesa has launched the third tranche of its share buyback program, indicating its commitment to returning value to shareholders. The company has space in its debt for both CapEx and buybacks, with a target net debt to EBITDA ratio between 2.5x and 3x. Endesa is also exploring M&A opportunities, particularly in projects that are up and running, leveraging its balance sheet flexibility and decreased valuations for renewables pipeline in Spain.

3. NewsRoom

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Transaction in Own Shares

Oct -15

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Transaction in Own Shares

Oct -13

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Endesa (BME:ELE): Examining Valuation as Share Price Rally Pauses for Breath

Sep -20

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Societe Generale: shares & voting rights as of 31 August 2025

Sep -09

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Vaisala Corporation: Share Repurchase 9.9.2025

Sep -09

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Assessing Acciona (BME:ANA)'s Valuation After Recent Subtle Moves

Sep -09

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Deutsche Bank (XTRA:DBK): Assessing Valuation After a Period of Quiet Share Price Momentum

Sep -09

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Is Vaisala (HLSE:VAIAS) Undervalued? A Fresh Look at Its Current Valuation

Sep -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.43%)

6. Segments

Generation and Supply - Energy Supply

Expected Growth: 7.3%

Growing demand for electricity, increasing focus on renewable energy sources, and increasing efficiency in thermal and nuclear power plants drive the growth of Endesa's Generation and Supply segment.

Distribution

Expected Growth: 3.5%

Growing electricity demand, increasing urbanization and government initiatives supporting renewable energy sources drive the distribution segment’s growth, with Endesa’s strong presence in Spain and Portugal contributing to its market share.

Generation and Supply - Supply of Other Products and Services

Expected Growth: 3.5%

Endesa S.A. is expected to drive revenue growth, fueled by increasing investment in renewable energy and grid modernization, as well as a growing demand for clean energy solutions.

Generation and Supply - Conventional Generation

Expected Growth: 3.1%

Endesa's conventional generation assets will drive growth, leveraging Spain's increasing energy demand, and a gradual shift towards thermal and combined-cycle power plants, supported by regulatory incentives and declining operating costs.

Generation and Supply - Renewable Generation

Expected Growth: 5.5%

Growing demand for renewable energy sources, coupled with Endesa’s extensive experience in wind and hydroelectric power generation, will drive the Generation and Supply segment’s growth.

Structure and Services

Expected Growth: 5.6%

Endesa’s growth drivers include a focus on renewable energy, increased energy efficiency, and cost savings initiatives, positioning the company for a forecast CAGR of 5.6%.

Consolidated Adjustments and Eliminations

Expected Growth: 3.4%

Endesa's subsidiaries' intercompany transactions adjustments will drive growth, fueled by increasing energy demand, expansion into renewable energy sources, and improving operational efficiency.

7. Detailed Products

Electricity

Endesa provides electricity to residential, commercial, and industrial customers through its distribution network.

Natural Gas

Endesa offers natural gas supply to customers, providing a clean and efficient source of energy.

Renewable Energy

Endesa generates and supplies renewable energy from sources like wind, solar, and hydroelectric power.

Energy Efficiency Solutions

Endesa provides energy-efficient solutions and services to help customers reduce energy consumption.

Electric Vehicle Charging

Endesa offers electric vehicle charging infrastructure and services for individuals and businesses.

Energy Storage

Endesa provides energy storage solutions to optimize energy usage and reduce peak demand.

Smart Grids and Metering

Endesa develops and implements smart grid technologies and advanced metering infrastructure.

8. Endesa, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Endesa, S.A. operates in a highly regulated industry, which limits the threat of substitutes. However, the increasing adoption of renewable energy sources and energy-efficient technologies poses a moderate threat to the company's traditional business model.

Bargaining Power Of Customers

Endesa, S.A. serves a large customer base, which reduces the bargaining power of individual customers. Additionally, the company's diversified customer portfolio and long-term contracts further mitigate this threat.

Bargaining Power Of Suppliers

Endesa, S.A. relies on a diverse range of suppliers for fuel, equipment, and services. While the company has some bargaining power due to its large scale, suppliers may still exert some pressure on prices and delivery terms.

Threat Of New Entrants

The energy industry is characterized by high barriers to entry, including significant capital requirements, regulatory hurdles, and complexity of operations. This limits the threat of new entrants to Endesa, S.A.'s business.

Intensity Of Rivalry

The energy industry is highly competitive, with several established players competing for market share. Endesa, S.A. faces intense rivalry from other major energy companies, which may lead to pricing pressures and competitive bidding for contracts.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 64.84%
Debt Cost 5.02%
Equity Weight 35.16%
Equity Cost 6.89%
WACC 5.68%
Leverage 184.45%

11. Quality Control: Endesa, S.A. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
ENGIE

A-Score: 7.2/10

Value: 7.0

Growth: 5.6

Quality: 3.6

Yield: 10.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Endesa

A-Score: 7.1/10

Value: 5.2

Growth: 4.1

Quality: 5.4

Yield: 8.8

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

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American Electric Power

A-Score: 6.9/10

Value: 5.7

Growth: 4.6

Quality: 6.8

Yield: 7.0

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

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Edison

A-Score: 6.4/10

Value: 8.3

Growth: 5.3

Quality: 7.5

Yield: 9.0

Momentum: 1.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Duke Energy

A-Score: 6.4/10

Value: 5.5

Growth: 4.7

Quality: 4.6

Yield: 7.0

Momentum: 6.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Iberdrola

A-Score: 6.2/10

Value: 3.7

Growth: 5.4

Quality: 4.6

Yield: 6.2

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

30.61$

Current Price

30.61$

Potential

-0.00%

Expected Cash-Flows