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1. Company Snapshot

1.a. Company Description

Terna - Rete Elettrica Nazionale Società per Azioni, together with its subsidiaries, engages in the electricity transmission and dispatching activities in Italy, Euro-area countries, and internationally.The company operates through Regulated, Non-Regulated, and International segments.It is involved in the planning, development, management, operation, and maintenance of national transmission grid, electricity infrastructures, and high-voltage infrastructures.


The company also offers telecommunications systems and equipment, connectivity services, energy solutions, and operation and maintenance services.In addition, it designs, produces, commercializes, and repairs power transformers for electricity transmission and distribution grids, industrial transformers for the steel and metals industries, and special transformers for convertors used in electrochemical production; designs, produces, and supplies marine and terrestrial cables; implements and develops renewable energy projects; and undertakes private interconnector projects, as well as owns the national transmission grid.The company was founded in 1999 and is headquartered in Rome, Italy.

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1.b. Last Insights on TRN

Terna's recent performance was bolstered by strategic partnerships and investments. The company's collaboration with IPTO for a new Italy-Greece electrical interconnection is a significant development, with an estimated €1.9 billion investment. This venture underscores Terna's commitment to expanding its European presence and diversifying its revenue streams. Additionally, the company's focus on infrastructure development and modernization is expected to drive growth in the coming quarters.

1.c. Company Highlights

2. Terna's 9M 2025 Earnings: A Strong Performance

Terna's financial performance in the first 9 months of 2025 was robust, with revenues and EBITDA increasing by 9% and 7% respectively, reaching EUR 2.882 billion and EUR 2.026 billion. The EPS came in at EUR 0.1554, beating analyst estimates of EUR 0.1395. The company's regulated revenues grew by 6% to EUR 2.357 billion, while non-regulated revenues saw a significant increase of 23% to EUR 525 million. This strong performance was driven by a higher contribution from the Equipment segment, with EBITDA from non-regulated activities rising by 51% to EUR 103 million.

Publication Date: Nov -14

📋 Highlights
  • Grid Development Progress: Tyrrhenian Link's first submarine cable completed, with western section underway, set to break depth record for high-voltage subsea cables.
  • CapEx Procurement Coverage: 88% of 2024-2028 CapEx plan (up from 80% in March) secured via contracts, covering major projects like Tyrrhenian, Adriatic, and SACOI 3 Links.
  • Financial Growth: 9M 2025 revenues rose 9% to EUR 2.882B, EBITDA up 7% to EUR 2.026B, with non-regulated EBITDA surging 51% to EUR 103M.
  • Regulatory Stability: 5.5% WACC for electricity transmission remains unchanged in 2026, ensuring consistent regulatory revenue framework.
  • Full-Year Guidance Confirmed: Terna expects 2025 revenues at EUR 4.03B, EBITDA EUR 2.7B, and net profit EUR 1.08B, with EUR 3.4B CapEx target for 2025.

Operational Highlights

The company made significant progress on its grid development projects, including the Tyrrhenian Link, with the first submarine cable of the eastern section completed and installation of the western section underway. Terna's CFO, Francesco Beccali, highlighted that 88% of the 2024-'28 CapEx plan is now covered by procurement contracts, up from 80% in March, providing visibility on the company's investment plans.

Regulatory Environment

The regulatory environment remains stable, with the current WACC of 5.5% for electricity transmission to remain unchanged in 2026. Terna expects the new Board of ARERA to be appointed before the end of the year, with no significant change expected in ARERA's approach towards the energy transition.

Valuation

Terna's valuation metrics indicate a reasonable price for the stock. The P/E Ratio stands at 21.88, while the EV/EBITDA ratio is 14.62. The ROE is 11.04%, indicating a decent return on equity. The Net Debt / EBITDA ratio is 5.93, which may be a concern, but the company's cash flow generation is robust, with a cash flow of around EUR 2.2 billion in the first 9 months of 2025.

Outlook

Terna has reaffirmed its full-year 2025 guidance, expecting revenues of EUR 4.03 billion and EBITDA of EUR 2.7 billion. The company remains focused on executing its industrial plan, with a strong pipeline of projects and a solid financial position. Analysts estimate revenue growth of 7.6% for next year, indicating a positive outlook for the company.

3. NewsRoom

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Terna (BIT:TRN): Assessing Valuation as Investor Interest Quietly Builds

Sep -10

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Terna SpA (TERRF) Q1 2025 Earnings Call Highlights: Strong Revenue Growth and Strategic ...

May -16

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Terna, IPTO partner for new Italy-Greece electrical interconnection

May -13

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Terna SpA (TERRF) Q3 2024 Earnings Call Highlights: Strong Growth in Revenue and Renewable ...

Nov -07

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CDPQ’s Verene Energia acquires 124km power transmission asset in Brazil

Jul -10

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Masdar Inks $3.4 Billion Deal to Acquire Greece Renewable Energy Major

Jun -20

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Terna SpA's Dividend Analysis

Nov -23

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.66%)

6. Segments

Regulated

Expected Growth: 6.5%

Terna's 6.5% growth is driven by increasing electricity demand, investments in grid modernization, and favorable regulatory framework. As the operator of Italy's high-voltage transmission grid, Terna benefits from a stable and regulated business model, ensuring a steady revenue stream. Additionally, the company's focus on renewable energy integration and grid resilience contributes to its growth momentum.

Non-Regulated

Expected Growth: 7.5%

Terna's Non-Regulated segment growth of 7.5% is driven by increasing demand for renewable energy, expansion into new markets, and strategic investments in grid modernization. Additionally, the Italian government's energy transition policies and incentives for grid resilience and sustainability contribute to this growth.

International

Expected Growth: 6.8%

Terna - Rete Elettrica Nazionale Società per Azioni's 6.8% growth is driven by increasing demand for electricity in Italy, government support for renewable energy, and strategic investments in grid infrastructure. Additionally, the company's focus on energy efficiency and grid modernization initiatives contribute to its growth.

7. Detailed Products

Transmission Grid Management

Terna manages and operates the high-voltage transmission grid, ensuring the safe and reliable transportation of electricity across Italy.

Electricity Transmission Services

Terna provides transmission services to generators, distributors, and traders, enabling the exchange of electricity between different regions and countries.

Grid Connection Services

Terna offers connection services to generators, distributors, and consumers, enabling them to connect to the transmission grid.

System Services

Terna provides system services, including frequency regulation, voltage support, and spinning reserve, to ensure the stability and reliability of the grid.

Energy Storage Services

Terna offers energy storage services, enabling the efficient management of energy supply and demand.

Grid Development and Maintenance

Terna develops and maintains the transmission grid, ensuring its reliability, efficiency, and sustainability.

8. Terna - Rete Elettrica Nazionale Società per Azioni's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is low for Terna - Rete Elettrica Nazionale Società per Azioni as the company operates in a highly regulated industry with high barriers to entry.

Bargaining Power Of Customers

The bargaining power of customers is medium for Terna - Rete Elettrica Nazionale Società per Azioni as the company operates in a duopoly market with limited customer switching options.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low for Terna - Rete Elettrica Nazionale Società per Azioni as the company has a diversified supplier base and is not heavily dependent on a single supplier.

Threat Of New Entrants

The threat of new entrants is low for Terna - Rete Elettrica Nazionale Società per Azioni as the company operates in a highly regulated industry with high barriers to entry.

Intensity Of Rivalry

The intensity of rivalry is high for Terna - Rete Elettrica Nazionale Società per Azioni as the company operates in a duopoly market with a strong competitor.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 70.80%
Debt Cost 3.95%
Equity Weight 29.20%
Equity Cost 6.30%
WACC 4.63%
Leverage 242.48%

11. Quality Control: Terna - Rete Elettrica Nazionale Società per Azioni 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
Entergy

A-Score: 6.5/10

Value: 4.8

Growth: 3.6

Quality: 4.7

Yield: 7.0

Momentum: 9.0

Volatility: 10.0

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Terna RETE

A-Score: 6.4/10

Value: 4.2

Growth: 5.6

Quality: 5.1

Yield: 7.5

Momentum: 6.0

Volatility: 10.0

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Centrica

A-Score: 5.9/10

Value: 6.5

Growth: 5.6

Quality: 3.5

Yield: 3.1

Momentum: 9.0

Volatility: 8.0

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Redeia

A-Score: 5.5/10

Value: 4.1

Growth: 2.1

Quality: 5.2

Yield: 7.5

Momentum: 4.0

Volatility: 10.0

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Elia

A-Score: 4.8/10

Value: 4.5

Growth: 6.0

Quality: 3.7

Yield: 3.1

Momentum: 5.0

Volatility: 6.3

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PGE Polska Grupa Energetyczna

A-Score: 4.5/10

Value: 9.3

Growth: 3.8

Quality: 2.4

Yield: 0.0

Momentum: 8.5

Volatility: 3.0

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

8.98$

Current Price

8.98$

Potential

-0.00%

Expected Cash-Flows