Iberdrola (IBE.MC): Exceptionalism

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Iberdrola (IBE.MC): Exceptionalism

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26 Jun 2026 02:00:56 ET │ 26 pages

Iberdrola (IBE.MC)

Exceptionalism

CITI'S TAKE

We have renewed our rating after a period of Rating Suspended with a

Neutral rating and 12m TP of €21.1. IBE trades at a near 30% premium to the

SX6P, an exceptionalism we think can only be justified by consistent Neutral from Rating Suspended

delivery of earnings growth, irrespective of the macro and political Price (25 Jun 26 17:30) €21.46

environment. Absent any confidence shock we assume this sizable

Target price €21.10premium stays, but given IBE shares also trade close to mega cap US utility

peers – which typically trade above Europeans - we see limited upside from from -

current levels. We view IBE’s operational delivery at an asset level as varied, Expected share price

with Network growth delivery better than Renewables, and Europe better -1.7% returnthan US and Brazil.

Expected dividend yield 3.3%

Exceptionalism — Our starting point to value Iberdrola is consistent with our SOTP Expected total return 1.6%

framework for the sector, based on long-dated cash flows, reflecting renewables Market Cap €145,023M

growth, RAB expansion and quality of assets. We benchmark IBE asset valuations

US$165,066Magainst comparable assets across our coverage to ensure consistency. However, the

stock continues to trade at c.30% premium to the sector on P/E and EV/EBITDA,

supported by its diversified earnings visibility and strategic positioning. Absent any

confidence shock, we assume such premium stays, similar to the blue-chip

premium seen in other defensive sectors. With IBE shares already trading close to Price Performance

the top of European/Global mega-cap utilities, we see limited scope for re-rating. (RIC: IBE.MC, BB: IBE SM)