On Monday, JPMorgan reiterated its Neutral rating on EDP Renovaveis SA (EDPR:LI) (OTC: EDRVF) with a steady price target of €17.50. The firm's analysis included adjustments to account for a lower anticipated cost in 2024 due to renegotiations of Power Purchase Agreements (PPAs) in Colombia. The estimated one-off impact for 2024 has been reduced from €50 million to €20 million.
The report also indicated a slight reprofiling of capital expenditure in the coming years and the addition of incremental financing from tax equity investors in 2024. These updates are expected to lead to a reduction in net financial debt over the next few years, although the total financial liabilities are not projected to change significantly.
Despite these adjustments, JPMorgan's valuation of the company remains the same, with the price target for the end of 2025 unchanged at €17.50. The firm anticipates a slow start to 2024 due to weak volumes, but expects volume normalization to contribute to an increase in earnings momentum in the second half of the year. JPMorgan's stance on the stock continues to be neutral, reflecting a cautious outlook on its near-term performance.
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