Morgan Stanley | Enagas will present its strategic plan 2022-2030 this week. We are not very positive ahead of this presentation as we expect the company will flag the potential growth in hydrogen. This is something which we believe is very long-term and seems already to be reflected in the price at 20 euros/share. Meanwhile the visibility with regard to financing is very limited.
In the most optimistic scenario the Spanish gas transport network would require investments of up to €6.3 Bn for 2040 to adapt to hydrogen. Assuming an NPV/capex of 30% this would mean an NPV of €1.2 Bn for Enagas, equivalent to 4.8 euros/share. But the lion’s share of these investments (€5.3 Bn) will be beyond 2030.
Enagas, Underweight, Target Price 17 euros/share.
