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1. Company Snapshot

1.a. Company Description

EDP - Energias de Portugal, S.A. engages in the production, transmission, distribution, and commercialization of electricity in Portugal, Spain, France, Poland, Romania, Italy, Belgium, the United Kingdom, Greece, Brazil, North America, and internationally.The company operates through Renewables, Networks, and Client Solutions & Energy Management segments.It primarily generates electricity through hydro, CCGT, coal, wind, solar, nuclear, and cogeneration sources.


The company is also involved in the commercialization of natural gas.It has an installed capacity of 25 GW; and serves 8.7 million electricity customers and 0.7 million gas customers.The company also operates 378,155 kilometers of distribution network lines.


In addition, it offers engineering, laboratory tests, professional training, and energy services, as well as manages real estate assets.EDP - Energias de Portugal, S.A. was incorporated in 1976 and is headquartered in Lisbon, Portugal.

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1.b. Last Insights on EDP

EDP's recent trajectory is driven by its growth plan, with a €12 billion investment program focused on renewables and electricity networks to capture rising electricity demand. This strategic move aims to leverage electrification and data center growth. Additionally, the company's valuation has been reassessed by investors, with some analysts questioning whether the current price justifies its prospects. EDP's focus on sustainable energy solutions and grid expansion positions it well for long-term growth. Its investments are expected to drive future performance.

1.c. Company Highlights

2. EDP Delivers Strong Q1 2025 Results with 6% EBITDA Growth

EDP reported a solid first quarter for 2025, with EBITDA increasing 6% year-on-year to €1.4 billion, driven by robust performance in integrated generation and supply in Iberia, higher power prices, and strong demand for flexible generation. Net profit rose 19% to €439 million, reflecting operational efficiency and favorable market conditions. The company also highlighted the resilience of its hydro generation, with reservoir levels at a 10-year high of 93%, supported by 42% above-average hydro resources. Electricity pool prices in Iberia nearly doubled to €85/MWh, further boosting margins.

Publication Date: May -10

📋 Highlights
  • EBITDA Growth: EBITDA increased by 6% year-on-year to €1.4 billion, driven by strong performance in Iberia and higher power prices.
  • Electricity Pool Prices: Prices in Iberia nearly doubled to €85/MWh, reflecting market volatility and demand for flexible generation.
  • Reservoir Levels: Hydro reservoirs reached a 10-year high at 93%, supported by 42% above-average hydro resources.
  • Net Profit Increase: Net profit rose by 19% to €439 million, benefiting from operational performance and market conditions.
  • Brazil Transmission Investments: 12 projects delivered since 2014 with BRL2.6 billion invested, supporting 7% growth in electricity demand.

Strong Operational Performance and Strategic Investments

The company’s flexible generation fleet continues to capitalize on market volatility, with hydro pump spreads exceeding 50% of baseload prices. EDP has updated its 2025 EBITDA guidance for integrated Iberia to €1.1-1.2 billion, reflecting strong Q1 performance and high reservoir levels. In networks, EDP proposed a 50% increase in investments for 2026-2030 in Portugal, supported by a favorable regulatory opinion. In Spain, the company is seeking improved investment conditions and returns. Additionally, EDP is on track to add 2GW of new wind and solar capacity in 2025, with 70% of projects under construction.

Financial Outlook and Valuation

EDP maintained its strong financial outlook for 2025, with EBITDA guidance at €4.8 billion, net profit at €1.2 billion, and net debt at €16 billion. Structural improvements in flexible generation and resilient electricity networks contributed to this confidence. The company’s valuation metrics indicate a P/E Ratio of 16.97 and a P/B Ratio of 1.18, suggesting moderate valuation levels. The dividend yield of 6.13% reflects the company’s commitment to returning value to shareholders.

Q&A Highlights and Management Insights

During the Q&A session, Miguel Stilwell de Andrade emphasized the importance of increased investment in grid infrastructure and energy storage following the recent blackout in Iberia. He also highlighted the company’s ability to manage risks with a diversified portfolio. Regarding guidance, he confirmed that the 2025 net income target of €1.2 billion remains realistic, despite non-recurring items and lower hedging levels. The company’s focus on efficiency improvements and supply chain management is expected to sustain growth in the U.S., supported by tax credits from the Inflation Reduction Act.

Analyst Estimates and Forward Outlook

Analysts have estimated a -0.9% revenue growth for next year, though the company’s strong Q1 performance and positive outlook suggest potential upside. The actual EPS of 0.03106 surpassed estimates of 0.01835, indicating stronger-than-expected profitability. With a free cash flow yield of -19.53%, the company is investing heavily in growth initiatives, which could drive long-term value creation.

3. NewsRoom

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Are Utilities Stocks Lagging Brookfield Renewable Partners (BEP) This Year?

Nov -25

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EDP Targets €12 Billion in Investments Under 2026–28 Growth Plan

Nov -06

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Evaluating EDP (ENXTLS:EDP) Shares: Is There Value Left After This Year's Strong Rise?

Oct -25

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Are Utilities Stocks Lagging Atmos Energy (ATO) This Year?

Oct -06

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Is Energias de Portugal (EDPFY) Outperforming Other Utilities Stocks This Year?

Sep -19

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LVMH: Share transactions disclosure

Sep -09

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The BANK of Greenland issued and early redemption of Senior Non-Preferred capital

Sep -09

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Cointreau Launches First-Ever Ready-To-Serve Range – Introducing Cointreau Citrus Spritz

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 (8.05%)

6. Segments

Renewables, Clients & Energy Management

Expected Growth: 9%

EDP's 9% growth in Renewables, Clients & Energy Management is driven by increasing demand for clean energy, strategic acquisitions, and investments in digitalization and grid modernization. Additionally, the company's focus on customer-centric solutions and energy efficiency services has contributed to its growth.

Networks

Expected Growth: 7%

EDP's 7% growth in Networks is driven by increasing demand for renewable energy, grid modernization, and electrification of transportation. Strong government support for decarbonization, rising electricity consumption, and EDP's strategic investments in grid infrastructure and digitalization also contribute to this growth.

Adjustments and Elimination of Inter-segment Operations

Expected Growth: 5%

EDP's 5% growth driven by increased renewable energy production, expansion into new markets, and cost savings from operational efficiencies. Additionally, strategic acquisitions and partnerships have enhanced the company's portfolio, while favorable regulatory environments have supported growth. Furthermore, investments in digitalization and grid modernization have improved operational performance and customer satisfaction.

Other

Expected Growth: 6%

EDP - Energias de Portugal, S.A.'s 6% growth in 'Other' segment is driven by increasing demand for renewable energy solutions, expansion into new markets, and strategic partnerships. Additionally, investments in digitalization and operational efficiency have improved cost management, contributing to the segment's growth.

7. Detailed Products

Electricity Generation

EDP generates electricity through various sources such as wind, hydro, thermal, and solar power.

Electricity Distribution

EDP distributes electricity to customers through a network of power lines, substations, and transformers.

Electricity Trading

EDP trades electricity on the wholesale market, buying and selling electricity to balance supply and demand.

Renewable Energy Solutions

EDP offers renewable energy solutions, such as wind and solar power, to customers seeking sustainable energy options.

Energy Efficiency Services

EDP provides energy efficiency services, including energy audits and optimization solutions, to help customers reduce energy consumption.

Electric Vehicle Charging Infrastructure

EDP develops and operates electric vehicle charging infrastructure, supporting the adoption of electric vehicles.

8. EDP - Energias de Portugal, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for EDP is medium due to the presence of alternative energy sources such as solar and wind power. However, the high cost of switching to these alternatives and the lack of infrastructure in some areas reduce the threat.

Bargaining Power Of Customers

The bargaining power of customers is low due to the lack of alternative energy providers in some areas and the high cost of switching to alternative energy sources.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers of fuel and other inputs. However, the high cost of switching to alternative suppliers and the lack of substitutes for some inputs reduce the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the energy industry, including the need for significant capital investment and regulatory approvals.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of multiple energy providers in the market, leading to intense competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 64.62%
Debt Cost 6.68%
Equity Weight 35.38%
Equity Cost 6.68%
WACC 6.68%
Leverage 182.61%

11. Quality Control: EDP - Energias de Portugal, S.A. passed 0 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 ->

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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 ->

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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 ->

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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 ->

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MVV Energie

A-Score: 6.2/10

Value: 8.7

Growth: 5.7

Quality: 3.1

Yield: 7.5

Momentum: 3.5

Volatility: 8.7

1-Year Total Return ->

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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 ->

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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

0.04$

Current Price

0.04$

Potential

-0.00%

Expected Cash-Flows