Iberdrola (AO) | Buy | H1 2026 results: Adjusted earnings beat and constructive vs. outlook

Research evidence excerpt

Iberdrola (AO) | Buy | H1 2026 results: Adjusted earnings beat and constructive vs. outlook

Even though we have plenty of margin of safety in our valuation,

Catalysts a significant structural move of the bond yield in the wrong

Enhanced capex in quality Network markets (US/UK). direction would hurt the stock. A +/- 50bp swing in the WACC

Partnerships with premium investors in selected Generation would have a negative impact on valuation of c. -8/+9%.

assets. Abrupt and sustained power price decline. We base our

Asset rotation at premium prices. valuation on long-term power prices of EUR40-50/MWh.

Key data charts

Price performance Sales split by region Sales split by division

SWOT analysis

Strengths Weaknesses

c. 80% of EBITDA from dependable regulated/LT contracted activities. Spain is a relatively unattractive Networks market.

Attractive dividend policy: "floor" mid-single-digit DPS CAGR. Lack of clarity on Spain's nuclear policy.

Networks' capex upside in attractive markets (UK and US). Complex business mix and exposure to many regulatory frameworks.

Ability to strike attractive partnership deals in the RES business. Potential exposure to permitting delay and supply chain issues.

Opportunities Threats

Significant investment opportunities in the markets where it operates. High bond yields have an adverse impact on valuation.

Scale advantage/bargaining power when facing investment opportunities. Potential adverse impact from cost inflation in RES project's IRRs.

Opportunities in new fields (batteries, data centres, hydrogen). Potential permitting delays and supply chain issues in renewables.

Growing asset rotation/value crystallisation opportunities. Spain tax-hungry in the Generation business.

keplercheuvreux.com 3