Voltalia: Stifel initiates as buyer, seeing potential

(CercleFinance.com) - Stifel announced on Thursday that it had initiated coverage of Voltalia shares with a Buy recommendation and a target price of E11, giving them 32% upside potential.


While acknowledging that the renewable energies specialist operates within a capital-intensive sector, the analyst also highlights the strong growth of its businesses and the promise of lucrative long-term contracts.

Within the sector, Voltalia stands out as a fast-growing player, Stifel adds, noting that the group in particular benefits from its status as a service provider and its expertise in deploying major rooftop solar projects.

After increasing its capacity from 0.9 GW to 2.8 GW between 2018 and 2023, the company has set itself the target of exceeding the 5 GW threshold by 2027, the broker says.

Despite these promising signs, the stock is now significantly undervalued, it adds, which attributes this to investor hesitation regarding the sector in general, and a series of profit warnings in particular.

Add to this the prospect - in the near future - of a capital increase needed to finance the company's growth projects, it continues.

However, after the rain, comes the sun, Stifel says, which sees the current share price as a unique opportunity to position itself in a group with solid fundamentals, whose operating profit (Ebitda) should almost double in the next three years, not to mention the favourable effect of lower interest rates.


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