Bankinter Analysis
The 2029 Strategic Plan aims to achieve average annual growth of 3% in net banking income (NBI) and 2% in total operating profit (TOP) over the 2025–29 period. The RAB will grow at an annual average of 7% and the financial return will also improve over this period (from 5.58% to 6.58%). Despite improvements in the RAB and financial return, earnings growth is moderate due to certain factors penalising the group in the new regulatory period 2026–2031. These factors relate to low remuneration for work in progress, delays in monetising new assets, cuts in Opex standards, and reduced efficiency incentives. Despite certain regulatory disappointments, Redeia returns to a path of earnings growth in the new regulatory period. Meanwhile, the group has recently published its first-quarter results and confirmed its full-year guidance. Q1 2026 net profit rose by 2%, in line with the consensus. On the positive side, the regulated electricity transmission business made a greater contribution (80% of total EBITDA). On the negative side, the fibre-optic and international businesses made a smaller contribution. As for the full-year guidance, the management team’s target is to achieve a net profit in excess of €510m (compared to €506m in 2025). Following these results and, above all, following the regulator’s proposal, we are cutting the target price to €16.50 per share from €17.50 per share. We maintain our Buy recommendation. Despite certain disappointments regarding regulation, Redeia will return to a growth trajectory in earnings during the next regulatory period (2026–2031). The dividend yield is high (5.4% in 2026) and rising (2% per year), and the upside potential to the Target Price remains attractive (~+10%). Link to the full report in Spanish.
Recommendation: Buy, Target Price €16.50/share (down from €17.50/share)
