Bankinter | Beats earnings and revises full-year guidance upward. The networks division drives growth for the group. Key figures compared to consensus: Adjusted EBITDA (x capital gains from asset sales and provisions) €12.438 billion (up 7.7%) versus €12.117 billion estimated., Adjusted BNA: €5.116 billion (up 16.6%) versus €4.932 billion estimated. Revises upward its guidance for the year, from high single-digit net profit growth to double-digit growth, exceeding €6.6 billion.
Bankinter analysis team’s view: Good results, beating consensus estimates and with an upward revision in guidance for the year. Adjusted net profit, excluding extraordinary items, grows by 17%. Positive factors: (i) Growth in the regulated asset base in networks (14%) and tariff revisions; (ii) New capacity in renewables (3%) and (iii) Higher hydroelectric generation (5%).
These factors offset the negative impacts of lower trading margins and a weaker dollar. The management team has revised its guidance for 2025 upwards. It now expects double-digit growth in net banking income exceeding €6.6 billion, whereas previously it had forecast high single-digit growth in adjusted net banking income. The consensus expects net banking income for the year to be around €6.3 billion or €6.4 billion.
Following these results, we maintain our Buy recommendation and see room for further upward revisions in valuation. Reasons: (i) Successful strategic positioning. Its positioning in networks and renewables, geographical diversification, and solid financial structure enable it to capture opportunities in the new energy transition scenario; (ii) Growth, driven by the networks division. In its Strategic Plan, Iberdrola forecasts high single-digit growth in net profit in the period 2024-2028 (>8%). RAB will grow at an average annual rate of 9.3% (40% in total in the period 2024-2028) and with very attractive returns (ROE 9.5%); (iii) Shift towards a business profile with greater visibility and less volatility. Most future investments are directed towards the network business, which is subject to predictable regulatory frameworks. In addition, long-term contracts (PPAs) are increasing in the generation business so as not to depend on market volatility; (iv) Attractive valuation ratios: PER 2026 of 17.5x and 4.10% dividend yield in 2026.
