(Finance) – Equity has improved to “Buy” from “Hold” la recommendation on A2Aalso raising the target price to 2.7 euros per share (from the previous 2.5 euros, +8%), as part of the revision of the outlook for 2025 (more positive view on the stock markets and a substantially neutral positioning on the utilities segment).
On the Utilities sector overall, analysts believe that, after the weak performance of 2024 (+1.5% of the FTSE Italy Utilities index vs +10.6% of the FTSE Italy All share index) and looking to 2025, the segment can benefit from: substantial stability in the integrated margin (generation + retail) net of the positive one-offs in 2024; a favorable political/regulatory attitude towards the Electricity networks (strengthening and resilience) and Water networks (reduction of water losses); interest rate scenario further improvingwith expectations of a further cumulative cut by the ECB of around 130 basis points; stable prices for circular economy activities (waste), with the need for further capacity building in treatment activities.
Furthermore, they believe that in this market context A2A: has one of the most balanced strategies in the sector; have attractive growth rates in the coming years, with a CAGR of +5% EBITDA and +4.1% EPS until 2027; treats a attractive multiplesat 10.1x PE and 6x EV/EBITDA in 2026 with limited leverage (2.6x D/EBITDA) and a yield of 4.8%.