Jefferies starts Terna at 'hold', upside limited despite strong investment outlook

Terna Rete Elettrica Nazionale SpA

23/01/2026 08:26

** Jefferies initiates coverage on Italy's power grid operator Terna TRN.MI, rating the stock "hold" and setting a PT of 9.80 euros/share on a stretched valuation and a balance sheet with limited headroom, despite a strong grid investment outlook

** It says the firm's 18 billion-euro ($21.13 billion)capital expenditure plan "will keep the balance sheet tight, limiting flexibility for future growth," with net debt to EBITDA ratio forecast to rise to around 6 times by 2029

** It expects Terna's regulated asset base to grow by about 9% a year through 2029, as Italy upgrades its power grid, but forecasts earnings per share to grow more slowly at around 5.5% over the period due to higher depreciation and financing costs

** Jefferies adds the shares trade at a premium of roughly 20% to 2027 regulated asset base (RAB), compared with a five-year average of about 15%, leaving little room for further re-rating

** Out of 20 analysts that cover Terna, five rate the stock "strong buy" and "buy", 12 rate it "hold" and three rate it "sell" - LSEG data

($1 = 0.8519 euros)

 (Reporting by Laura Contemori)

 ((Laura.contemori@thomsonreuters.com))