Energias de Portugal (EDP PL) Buy: Q1 beat, 2026 guidance upgrade, improved outlook

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Energias de Portugal (EDP PL) Buy: Q1 beat, 2026 guidance upgrade, improved outlook

previous guidance in the range of EUR4.9bn-5.0bn and net profit at cEUR1.3bn versus old

guidance in the range of EUR1.2-1.3bn. Our new numbers are in line with guidance. The main

drivers behind the guidance upgrade are:

◆ improved outlook for networks in Iberia with higher investments, efficiency, returns and

positive impact from forex movements in Brazilian networks;

◆ increased hydro generation due to record hydro availability in Iberia with improvement in

power prices expected in H2 2026; and

◆ guidance upgrade in EDPR due to expectations of higher asset rotation gains and efficiencies.

Positive growth outlook for Iberian networks: EDP reported capex of EUR164m in Iberia,

implying an increase of 40% versus 1Q 2025. The company plans to invest EUR0.7bn in Iberian

electricity networks for 2026, which implies a 4% uplift versus its expectations announced in the

strategic plan. Overall, as per its business plan, EDP planned capex of EUR3.0bn in Portugal

and EUR1.1bn in Spain during 2026-30. In Portugal, the government has requested a resiliency

study for networks, which could provide further investment opportunities in the future. In Spain,

review of an investment cap is pending and ambitions to tackle congestion also bode well. EDP

also has additional investments to repair networks after recent storms.

Recovery in power price post February: Hydro resources in Iberia were more than 50%

above the historical average during Q1 2026. Together with extraordinary wind resources on the

back of storms, this translated into low average electricity prices in 1Q26, especially during

February when baseload power prices were at EUR11/MWh. However, prices have recovered