Exane BNP Paribas starts A2A at 'neutral', citing flat earnings outlook

A2A

04/07/2025 08:57

** Exane BNP Paribas initiates coverage of Italian regional utility A2A A2.MI at 'neutral', citing flat earnings outlook until the end of the decade and regulatory uncertainty over hydro concessions

** Broker says growth in supply, smart infrastructure, and waste units won't offset lower generation contributions due to lower power prices and normalising hydro output

** As the stock is "inexpensive for a reason, we initiate at Neutral with a 2.4 euros ($2.82) price target," the broker says

** It forecasts net income Compound Annual Growth Rate (CAGR) of -0.6% between 2025 and 2027

** It adds A2A trades at a 10-15% discount to its historical average and peers, noting an earlier favourable outcome on hydro concessions could be an upside catalyst

($1 = 0.8497 euros)

 (Reporting by Laura Contemori)

 ((Laura.contemori@thomsonreuters.com))