First Read: CEZ "Impact of the Middle East situation in focus during 1Q26 call"

Research evidence excerpt

First Read: CEZ "Impact of the Middle East situation in focus during 1Q26 call"

Global Research

14 May 2026ab

First Read

EquitiesCEZ

Impact of the Middle East situation in focus Czech Republic

during 1Q26 call Electric Utilities

12-month rating Sell

12m price target Kc600.00

Management comfortable with upgraded FY26 guidance

CEZ presented 1Q26 results this morning, which showed net income slightly above

UBSe but a strong beat versus consensus. The company also raised 2026 EBITDA Price (13 May 2026) Kc1,218

guidance from CZK 103-108bn to CZK 107-112bn and adj. net income guidance from RIC: CEZP.PR BBG: CEZ CP

CZK 27-31bn to CZK 30-34bn. This is driven in part by the current situation in the

Trading data and key metrics

Middle East, where CEZ is benefitting from higher spot prices on unhedged volumes and

higher lignite generation. Whilst CEZ already achieved >40% of the mid-point of this 52-wk range Kc1,371.00-1,134.00

net income guidance in Q1, management highlighted that Q1 is always usually a strong Market cap. Kc655b/US$31.5b

quarter, and they do not feel the guidance is overly conservative. Shares o/s 538m (ORD)

Free float 30%

Benefits from current crisis predominantly short-term Avg. daily volume ('000) 146

CEZ sees the main benefit from the current energy crisis as short-term with a sharp move Avg. daily value (m) Kc174.7

up in near-term prices but limited moves in the curve two or three years out (as we Common s/h equity (12/25E) Kc241b

discussed here). Management did however highlight that the small improvement in P/BV (12/25E) 2.7x

2027/28 power prices combined with a decline in carbon prices has enabled CEZ to lock- Net debt to EBITDA (12/25E) 2.6x

in some forward lignite volumes at a profit. Any benefit is expected to be much more

EPS (UBS, diluted) (CZK)