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1. Company Snapshot

1.a. Company Description

REN - Redes Energéticas Nacionais, SGPS, S.A., through its subsidiaries, engages in the transmission of electricity and natural gas in Portugal.It operates in two segments, Electricity and Gas; and Telecommunications.The company operates as a national electricity transmission network; purchases, sells, imports, and exports electricity and natural gas; manages a concession to operate a pilot area for the production of electric energy from ocean waves; and operates a telecommunications network.


It also operates liquefied natural gas terminal maintenance and regasification facilities; manages projects and ventures in the natural gas sector; provides underground storage development, maintenance, and operation services; offers natural gas transport and management services; and distributes natural gas, as well as provides communication and sustainability, marketing, business management, business development and consulting, and IT project services.In addition, the company invests in assets, shares, companies, and associations; transmits and transforms electricity in Chile, as well as participates, finances, collaborates, and conducts management of companies; and manages back offices.As of December 31, 2021, it operated national electricity transmission system with 8,907 kilometers in lines, 70 transformer substations, and 17 switching and transition stations; and national natural gas transmission network with 1,375 kilometers of high-pressure gas pipelines, 66 junction stations for pipeline branching, 45 block valve stations, 5 T-branch interconnection stations, 85 gas pressure regulating and metering stations, and 2 custody transfer stations.


The company was founded in 1994 and is headquartered in Lisbon, Portugal.

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1.b. Last Insights on RENE

REN's recent performance has been positively driven by regulatory updates, which may enhance the company's long-term prospects. The utility giant has seen a significant surge in value this year, potentially reflecting improved business conditions. With no recent earnings release to directly assess the company's financial health, attention turns to the impact of regulatory changes on its operations. Analysts at Investing.com have initiated a "buy" rating on REN, citing potential for growth. Additionally, the company's focus on renewable energy and grid management positions it well for future growth.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Does REN's 30% Price Surge in 2024 Reflect Its True Value After Regulatory Updates?

Sep -15

Source:

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REN-Redes Energeticas Nacionais Sgps SA (FRA:RN4) Q1 2025 Earnings Call Highlights: Strong ...

May -12

Source:

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Spain, Portugal Hit by Sweeping Blackout

Apr -28

Source:

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REN-Redes Energeticas Nacionais Sgps SA (FRA:RN4) Q4 2024 Earnings Call Highlights: Strong ...

Mar -10

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (0.94%)

6. Segments

Electricity

Expected Growth: 1.0%

Electricity from REN - Redes Energéticas Nacionais, SGPS, S.A. growth driven by increasing renewable energy demand, government incentives for sustainable power, and grid expansion projects. Additionally, rising industrial and residential electricity consumption, coupled with REN's efficient transmission and distribution network, contribute to the 1.0% growth.

Gas

Expected Growth: 0.8%

REN's 0.8% growth in Gas segment is driven by increasing demand for natural gas in Portugal, fueled by industrial and residential consumption. Additionally, REN's strategic investments in infrastructure and network expansion have improved efficiency and reliability, attracting new customers and increasing market share.

Telecommunications

Expected Growth: 0.9%

REN's 0.9% growth in Telecommunications is driven by increasing demand for high-speed internet and data services, coupled with investments in 5G network infrastructure and fiber-optic expansion. Additionally, growing adoption of IoT devices and cloud computing services contribute to the segment's growth.

Others

Expected Growth: 0.7%

REN's 0.7 growth is driven by increasing electricity transmission volumes, favorable regulatory framework, and cost savings from operational efficiency initiatives. Additionally, investments in grid modernization and expansion into renewable energy sources contribute to the company's growth momentum.

7. Detailed Products

Transmission Services

REN operates and manages the high-voltage transmission grid, ensuring the safe and reliable transportation of electricity from power plants to the distribution grid.

Distribution Services

REN manages and operates the medium-voltage distribution grid, delivering electricity to end-consumers, including households, businesses, and industries.

System Operation Services

REN is responsible for the operational management of the national electricity system, ensuring the balance between electricity supply and demand in real-time.

Market Services

REN provides market services, including the management of the day-ahead and intraday markets, ensuring the efficient allocation of electricity resources.

Grid Connection Services

REN provides connection services, enabling the integration of new power plants, renewable energy sources, and other generation facilities into the grid.

Consulting and Engineering Services

REN provides consulting and engineering services, supporting the development of electricity infrastructure projects, including grid expansion and modernization.

8. REN - Redes Energéticas Nacionais, SGPS, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for REN - Redes Energéticas Nacionais, SGPS, S.A. is medium due to the presence of alternative energy sources such as solar and wind power.

Bargaining Power Of Customers

The bargaining power of customers for REN - Redes Energéticas Nacionais, SGPS, S.A. is low due to the lack of alternative energy providers in the market.

Bargaining Power Of Suppliers

The bargaining power of suppliers for REN - Redes Energéticas Nacionais, SGPS, S.A. is medium due to the presence of multiple suppliers in the market.

Threat Of New Entrants

The threat of new entrants for REN - Redes Energéticas Nacionais, SGPS, S.A. is low due to the high barriers to entry in the energy transmission and distribution market.

Intensity Of Rivalry

The intensity of rivalry for REN - Redes Energéticas Nacionais, SGPS, S.A. is high due to the presence of multiple players in the energy transmission and distribution market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 64.19%
Debt Cost 3.95%
Equity Weight 35.81%
Equity Cost 5.22%
WACC 4.40%
Leverage 179.21%

11. Quality Control: REN - Redes Energéticas Nacionais, SGPS, S.A. passed 2 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
REN

A-Score: 7.3/10

Value: 6.6

Growth: 4.7

Quality: 5.7

Yield: 8.1

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

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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
Telecom Plus

A-Score: 6.7/10

Value: 4.5

Growth: 7.7

Quality: 6.1

Yield: 8.1

Momentum: 5.5

Volatility: 8.0

1-Year Total Return ->

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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 ->

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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 ->

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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 ->

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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

0.03$

Current Price

0.03$

Potential

-0.00%

Expected Cash-Flows