EDP: Best Idea 3Q26 - multiple ways to win, Outperform

研报英文原文证据摘录

EDP: Best Idea 3Q26 - multiple ways to win, Outperform

hydro fleet captures a premium over the wholesale price (~20% for reservoir and >60% for

pumping). Considering the low maintenance capex, the FCF generation is considerably high (we estimate EBITDA of €550m

at €60/MWh). The assets have a remaining concession life of 27 years, on average providing long-dated, highly visible cash

flows. EDP’s current market values implies a low multiple for its Iberian hydro assets (EV/EBITDA 2028e of 5.6x) while the value

generation is increasing due to increased market volatility, with upside from Iberian power demand trends. Based on a DCF, the

NPV suggests upside of €2.65bn or 14% of EDP’s market value.

Rising Iberian power demand presents upside potential, underpinned by structural electrification trends, data center expansion,

and emerging green hydrogen projects. This demand growth provides a floor to wholesale prices and supports sustained upward

pressure, directly benefiting EDP’s merchant and partially hedged generation portfolio. We estimate ~11.7TWh of merchant-

exposed output by 2028e, implying that a €5/MWh increase in Iberian power prices could drive +3.5% uplift to net profit.

Incremental demand requires significant new renewable capacity, with ~14.3GW needed to support forecast data center growth

alone, creating a multi-year development and PPA opportunity for EDP through hydro and onshore renewables.

3. REGULATED NETWORKS - NEW REGULATORY PERIODS PROVIDE QUALITY EARNINGS

The key regulatory catalysts have largely occurred, providing EDP with strong visibility on network returns and growth towards

the end of the decade. Both Portugal and Spain have entered new regulatory periods from 2026 with improved allowed returns,