MS starts Elia with 'overweight,' notes sector-leading network growth

Elia SA

05/04/2024 10:08

** Morgan Stanley initiates coverage of Belgium's Elia Group
 ELI.BR  with "overweight", says stock is its preferred
pure-play electricity network
        ** MS notes sector-leading 20% network growth with only
7% growth currently priced in
  
    ** "The recent CMD outlined a capex plan that will see the
regulated asset base (RAB) grow 170% over the next 5 years,
underpinned by supportive regulation in Belgium and Germany," MS
says
    ** MS says Elia plans to grow its RAB at a 20% compound
annual growth rate, placing it firmly at the forefront of the
regulated sector, where electricity network growth is set to
average 8%
    ** The stock trades on a premium to RAB of only 23%, well
below the about 40% MS deems justified
    ** The brokerage forecasts an additional 4 bln euros ($4.33
bln) of equity issuance to help fund the 2024-2028 capex plan
    ** Stock was up 1.17% at 0907 GMT, topping the BEL 20 Index
 .BFX 

($1 = 0.9229 euros)

 (Reporting by Mathias de Rozario)
 ((mathias.derozario@thomsonreuters.com))