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1. Company Snapshot

1.a. Company Description

Iren SpA, together with its subsidiaries, operates as a multi-utility company in Italy.It operates through Networks, Waste Management, Energy, Market, and Other Services segments.The company produces and distributes electricity primarily from hydroelectric, thermoelectric, cogeneration, and other renewables, as well as distributes natural gas.


It distributes electrical energy through 7,849 kilometers of medium and low voltage networks to approximately 725,000 connected users; and natural gas through its network of approximately 8,115 kilometers of high, medium, and low-pressure pipes to approximately 741,000 customers.The company also operates integrated water cycle, which includes 20,088 kilometers of pipeline networks that serve 2.8 million residents; 11,291 kilometers of sewerage networks; and operates treatment plants.In addition, it is involved in the provision of services related to street lighting systems, traffic light systems, heating systems, and electrical and special systems; collection and disposal of waste; snow clearing services; and analysis laboratories, telecommunications, and other services.


It operates 23 hydroelectric plants, 7 thermoelectric cogeneration systems, and 1 thermoelectric plant, as well as 95 photovoltaic production plants with an installed capacity of 18 MW.Iren SpA is based in Reggio Emilia, Italy.

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1.b. Last Insights on IRE

Iren SpA's recent performance was bolstered by a 6.5% increase in EBITDA, driven by significant expansion in renewable energy production. The company's strategic investments in this sector have yielded substantial returns, underscoring its commitment to sustainable energy solutions. Additionally, Iren SpA has been actively pursuing energy efficiency projects, albeit with some challenges, which is expected to contribute to its long-term growth prospects.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.63%)

6. Segments

Market

Expected Growth: 6.47%

Iren SpA's 6.47% growth is driven by increasing demand for renewable energy, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on energy efficiency and cost reduction initiatives has improved operational performance, contributing to the growth. Furthermore, favorable regulatory policies and investments in digitalization have also supported the company's growth momentum.

Energy

Expected Growth: 4.73%

Iren SpA's 4.73% energy segment growth is driven by increasing demand for renewable energy, favorable regulatory policies, and strategic investments in grid infrastructure. Additionally, the company's focus on energy efficiency and cost reduction initiatives has improved operational performance, contributing to the growth.

Not Allocatable

Expected Growth: 4.65%

Iren SpA's 4.65% growth is driven by increasing demand for renewable energy, successful cost-cutting initiatives, and strategic acquisitions. Additionally, favorable regulatory environments and investments in grid infrastructure have contributed to the company's growth. These factors have enabled Iren SpA to expand its customer base and improve operational efficiency, resulting in sustained revenue growth.

Environment

Expected Growth: 8.5%

Iren SpA's 8.5% growth in the Environment segment is driven by increasing demand for renewable energy sources, stringent regulations on pollution, and growing investments in waste management infrastructure. Additionally, the company's focus on sustainable development and circular economy practices has contributed to its growth in this segment.

Networks

Expected Growth: 4.77%

Iren SpA's 4.77% growth in Networks segment is driven by increasing demand for renewable energy, expansion of smart grid infrastructure, and strategic investments in digitalization and electrification of transportation. Additionally, favorable regulatory policies and growing focus on energy efficiency contribute to the segment's growth.

Other Services

Expected Growth: 8.5%

Iren SpA's 8.5% growth in Other Services is driven by increasing demand for energy efficiency solutions, expansion of waste management services, and strategic partnerships in the environmental sector. Additionally, investments in digitalization and process optimization have improved operational efficiency, contributing to the segment's growth.

7. Detailed Products

Electricity

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

Natural Gas

Iren SpA supplies natural gas to customers through its distribution network, providing a clean and efficient source of energy.

Heat and Cooling

Iren SpA offers district heating and cooling services, providing thermal energy to buildings and industries.

Water

Iren SpA manages and distributes water resources, providing clean drinking water to households and industries.

Waste Management

Iren SpA offers waste collection, treatment, and disposal services, promoting sustainable waste management practices.

Energy Efficiency

Iren SpA provides energy efficiency solutions, helping customers reduce energy consumption and emissions.

Renewable Energy

Iren SpA develops and operates renewable energy sources, such as wind, solar, and hydroelectric power plants.

8. Iren SpA's Porter Forces

Forces Ranking

Threat Of Substitutes

Iren SpA operates in the energy sector, which has few substitutes. However, the increasing adoption of renewable energy sources and energy-efficient technologies may pose a moderate threat to the company's operations.

Bargaining Power Of Customers

Iren SpA's customers have limited bargaining power due to the company's dominant position in the Italian energy market and the lack of alternative suppliers.

Bargaining Power Of Suppliers

Iren SpA relies on a diverse range of suppliers for its energy production, which reduces the bargaining power of individual suppliers. However, the company's dependence on imported fuels may expose it to supply chain disruptions.

Threat Of New Entrants

The energy sector has high barriers to entry, including significant capital requirements and regulatory hurdles, which limits the threat of new entrants to Iren SpA's market share.

Intensity Of Rivalry

The Italian energy market is highly competitive, with several established players competing for market share. Iren SpA faces intense rivalry from companies such as Enel and Edison.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 62.54%
Debt Cost 7.74%
Equity Weight 37.46%
Equity Cost 7.74%
WACC 7.74%
Leverage 166.95%

11. Quality Control: Iren SpA passed 3 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
Iren

A-Score: 6.7/10

Value: 7.1

Growth: 5.6

Quality: 3.4

Yield: 7.5

Momentum: 8.0

Volatility: 8.7

1-Year Total Return ->

Stock-Card
ACEA

A-Score: 6.6/10

Value: 5.8

Growth: 5.6

Quality: 4.9

Yield: 8.1

Momentum: 7.0

Volatility: 8.3

1-Year Total Return ->

Stock-Card
A2A

A-Score: 6.6/10

Value: 7.6

Growth: 6.4

Quality: 3.8

Yield: 7.5

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

Stock-Card
Hera

A-Score: 6.5/10

Value: 6.8

Growth: 5.7

Quality: 3.9

Yield: 6.9

Momentum: 6.0

Volatility: 9.7

1-Year Total Return ->

Stock-Card
EVN

A-Score: 5.9/10

Value: 6.6

Growth: 6.6

Quality: 5.6

Yield: 5.6

Momentum: 2.5

Volatility: 8.7

1-Year Total Return ->

Stock-Card
EDP

A-Score: 5.9/10

Value: 6.5

Growth: 3.4

Quality: 3.4

Yield: 7.5

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.53$

Current Price

2.53$

Potential

-0.00%

Expected Cash-Flows