MS ups Redeia to 'equal-weight' as Hispasat sale removes funding overhang

Elia SA

19/03/2025 08:59

** Morgan Stanley raises Redeia REDE.MC to "equal-weight" from "underweight", seeing a balanced risk/reward ahead of the Spanish networks regulatory review and after its Hispasat disposal

** "Expectations on the Spanish networks regulatory review have become more reasonable," it says

** The recent divestment largely removed the risk of funding overhang together with capex subsidies that should allow the utility to reach 17% FFO/debt on average over 2025-2027, it says

** MS sees continued investor appetite into Redeia's equity story with purer exposure to networks growth, as about 90% of Redeia's EBITDA now comes from Spanish electricity networks

** But Redeia's shares are not cheap, it says, preferring cheaper names like "overweight"-rated National Grid NG.L, E.ON EONGn.DE and Elia ELI.BR

** Out of 19 analysts that cover Redeia, ten rate it "strong buy" or "buy", ​seven "hold" and two​ "strong sell" or "sell"

 (Reporting by Tiago Brandao)

 ((Tiago.Brandao@thomsonreuters.com;))