Endesa (ELE SM): Hold: Grid-led growth; strong balance sheet

Research evidence excerpt

Endesa (ELE SM): Hold: Grid-led growth; strong balance sheet

Equities ● Electric Utilities

13 July 2026

Since 2024, Endesa share prices more than doubled driven by supportive regulatory

environment, improved outlook for Spanish networks and renewables

50 Endesa share price evolution, in EUR/share

Clean energy Strategic transition

40 Strong dividend rerating partly and regulatory

yield mitigating offset by Covid upside

Sector derating regulatory risks impact

Jul-16 Jul-17 Jul-18 Jul-19 Jul-20 Jul-21 Jul-22 Jul-23 Jul-24 Jul-25 Jul-26

Source: LSEG Datastream, HSBC estimates

Endesa presented its strategic plan for the period 2026-28 on 24 February 2026 including

investments of EUR10.6bn during 2026-28 with c52% or EUR5.5bn allocated to networks,

c28% or EUR3.0bn to renewables, c9% or EUR0.9bn to customers, and EUR1.2bn (11%) to

conventional generation and other activities. Endesa has shifted its investment to regulated

networks with c40%increase in capex versus its previous 2025-27 plan and a more selective

approach for renewables with investment falling 20% versus the previous plan.

With these investments, Endesa targets EBITDA to increase from EUR5.8bn in FY 2025 to

EUR6.2-6.5bn in 2028. The company expects roughly 85% of its 2026-28 cumulated EBITDA to

come from regulated or contracted activities, providing substantial earnings visibility. At the

bottom line, Endesa targets net ordinary income of EUR2.5-2.6bn by 2028, also a c4% CAGR,

with NOI/EBITDA conversion maintained at c40%.

In terms of shareholder remuneration, Endesa sets a new dividend policy with minimum payout

ratio of c70% and DPS growing in line with EPS at a CAGR of c4%. Out of its EUR2bn share

buyback program, the company already executed cEUR0.6bn with another EUR1.4bn to be

addressed during 2026-28.