Elia shares jump on Citi upgrade after regulator approves tariffs

Elia SA

15/11/2023 08:40

** Shares of grid operator Elia  ELI.BR  climb 4.8% to the
top of Belgium's BEL20 index  .BFX  as Citi upgrades the stock
to "buy" from "neutral" a day after Belgian regulator approved
tariffs for 2024-2027
    ** Elia on Tuesday said electricity transmission tariffs in
Belgium will rise by an average of 77% during this period; they
will be stable in 2024 vs 2023 and increase more significantly
from 2025
    ** The approval "raised headline allowed ROE by 1.49% to
5.6% providing much needed return uplift and regulatory
visibility", Citi says
    ** The broker estimates the impact of CREG's decision to
raise regulated returns will be more than 30 million euros
($32.60 million) on Elia's net profit
    ** Elia's capex of 6.4 billion euros for 2024-2027 is in
line with the group's plan to spend 7.2 billion on its Belgium
grid, Citi adds
    ** Funding pressure is also lower due to credit rating
target adjustment and regulatory returns enhancement, it says
    ** Out of eight analysts covering the stock, three rate it
"buy" or "strong buy", and five "hold"

($1 = 0.9202 euros)

 (Reporting by Dagmarah Mackos)
 ((dagmarah.mackos@tr.com))