Enel shares rise as Jefferies cites Spain as the driver of third-quarter EBITDA

(Il Sole 24 Ore Radiocor) - Whilst the Milan Stock Exchange continues to struggle, Enel is bucking the trend. The share price is being buoyed by a report from Jefferies providing a preview of the third-quarter 2026 results due to be released on 12 November. “We expect a moderate quarter, with EBITDA broadly stable year-on-year at €5.8 billion and net profit of €1.8 billion, down 2%” compared with the same period last year. Experts expect that “the positive performance of the Networks and Retail divisions will largely offset the weaker contribution from the Renewable Energy, Generation and Trading divisions”. Overall , brokers do not anticipate any changes to the company’s guidance “as the underlying operational trends remain broadly consistent with those observed in the first half of 2026. We are keeping our estimates for the full financial year unchanged.”

Going into more detail, Jefferies forecasts EBITDA growth for the Networks division of “13 per cent year-on-year, driven by the increase in the regulated asset base and the positive effects of adjustment payments in Spain”. For the Retail division, “we estimate EBITDA growth of 4 per cent year-on-year, driven by the renegotiation of contracts in Spain, whilst in Italia the result is expected to remain broadly stable”. Experts believe these positive contributions are likely to be partially offset “by weaker EBITDA in the Renewable Energy division (-6 per cent year-on-year), due to lower output from green sources in Spain and weaker hydroelectric generation in Italia”. As regards the Generation and Trading division, “we forecast a 29 per cent year-on-year decline in EBITDA, mainly due to reduced hedging coverage in Italia, a trend that had already emerged in the first half of 2026. Below EBITDA, we expect an increase in net financial expenses, due to higher levels of debt’. Overall, “we expect net profit to fall by 2 per cent year-on-year in the third quarter of 2026, with the cumulative result for the first nine months of the year representing approximately 80 per cent of our estimate for the full 2026 financial year”.

Part of the report is devoted to debt: ‘We forecast net debt of around €65 billion at the end of the first nine months of 2026, up 7 per cent from the approximately €61 billion recorded at the end of the first half of 2026.’ According to their analysis, the increase would be mainly attributable to dividend payments totalling around €3.3 billion, the buyback of own shares worth €750 million, and the acquisition of renewable energy assets in the United States and Italia for around €800 million.

Finally, a note on measures for energy bills. Experts point out that Italia and the European Commission have reached a preliminary agreement on a temporary cap on the price of gas used in thermal power stations, similar to the Iberian mechanism, with a potential level of around 60 euros/MWh. Based on the marginal production costs of combined-cycle gas-fired power stations, this measure would imply an electricity price in Italia in the region of 150–160 euros/MWh, which is lower than the price implied by the futures curve for the first quarter of 2027, standing at around 198 euros/MWh. ‘Given that the mechanism would likely only apply from 2027 onwards, in order to comply with European regulations, and that Enel has already hedged a large part of its exposure for 2027 at prices below the level implied by the cap, we do not anticipate any impact on the company’s profits.’