CEZ (1K) | Reduce | 2026 guidance upgraded

Research evidence excerpt

CEZ (1K) | Reduce | 2026 guidance upgraded

Z upgraded its 2026 guidance to CZK107-112bn EBITDA from CZK103-108bn Net financial debt (m) 244,783 248,151 256,813

previously, and to CZK30-34bn adjusted net income from CZK27-31bn, mainly FCF (m) 21,985 17,224 9,960

reflecting higher realised electricity prices, higher utilisation of coal-fired EPS adj. and ful. dil. 64.90 59.29 44.92

facilities, higher coal mining volumes and stronger distribution EBITDA. Consensus EPS 63.91 55.10 49.35

Net dividend 52.03 47.54 36.01

▪As detailed in our previous report (link ), CEZ proposed an optimisation of the FY to 31/12 12/26E 12/27E 12/28E group’s ownership structure and governance, including the transfer of the

P/E adj and ful. dil. 20.0 21.9 29.0

customer segment into a dedicated subsidiary and the potential sale of a minority EV/EBITDA 10.1 10.5 11.4

stake, while retaining at least a 51% stake in the vehicle and in the strategic EV/EBIT 19.7 21.1 26.1

customer-facing businesses. FCF yield 3.1% 2.5% 1.4%

Dividend yield 4.0% 3.7% 2.8%

Deconstructing the forecasts ND(F+IFRS16)/EBITDA 2.2 2.3 2.5

▪We have fine-tuned our forecast after the Q1 results and the updated figures on Gearing 93.1% 92.9% 96.5%

hedging price/volumes until 2028. On average, EBITDA increases by 1.7% and net ROIC 6.5% 5.9% 4.8%

profit by c. 5% in 2026-28E. EV/IC 1.6 1.6 1.6

▪We were already above the previous company’s guidance, which we considered SectorE.ON Most Pref. SectorCEZ Least Pref.

too prudent. We remain slightly above the top-end of the new range provided. EDP Fortum

Valuation and investment conclusion Elia Hidroelectrica Enagas

▪Our estimates fine-tuning leads to a c. 6% increase in our TP from CZK1,040 to Engie

CZK1,100 per share (rounded as usual). We confirm our Reduce rating as we see Veolia