Exane starts Verbund with 'underperform' on earnings cliff

VERBUND AG

22/11/2024 09:25

** Exane BNP Paribas initiates coverage of Verbund  VERB.VI 
with "underperform" saying the Austrian green power company
faces earnings cliff in next two years
        ** The broker notes that Verbund was a key beneficiary
of the 2020-22 hike in power prices but assuming current forward
power prices, it expects a sharp decline in earnings over
2024-26
  
    ** It sees FY 2024 "still benefiting from favourable hedging
and above-average hydro volumes," which it believes may mean the
cliff is higher than currently priced in
    ** Exane also points to low growth prospects for EPS,
especially when compared to sector competitors
    ** Project delays and deteriorating economics in renewables
could also impact Verbund, Exane says, seeing a possible FY 2024
capex shortfall
     

 (Reporting by Bernadette Hogg)
 ((bernadette.hogg@thomsonreuters.com))