Spanish utility companies Red Electrica (ES:RED) and Iberdrola (ES:IBE) will report their annual results for 2022 on February 22. While the forecasted EPS for Red Electrica is higher than the previous year, their share prices remain a concern for investors.
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Iberdrola, on the other hand, has bullish prospects for earnings as well as share price growth.
Here we have used two tools from the TipRanks database. Firstly, the Earnings Calendar, which provides a list of upcoming results for the companies in different markets, Secondly, the Stock Comparison tool, which comes in handy to compare these stocks on various parameters.
Let’s have a look at more details on these Spanish stocks.
Red Electrica Corporacion
Red Electrica will report its Q4 and full-year earnings for 2022 in the next week. Analysts expect this Spanish utility provider to report Q4 EPS of €0.26 per share, 8.3% higher than the EPS of €0.24 in Q4 2021.
The company owns the national electricity grid in Spain and enjoys a dominant position in the country. For the first nine months of 2022, the company reported sales of €1.57 billion and earnings of €551.45 million.
The company is mainly known for its solid dividend payments, with a dividend yield of 5.01%. The sector average is 1.63%. The company recently paid a dividend of €0.22 per share in January 2023.
However, the stock performance remains troublesome for the shareholders. In the last six months, the stock has been trading down by 15.6%.
Iberdrola, S.A.
Iberdrola is a leading name in the renewable energy space. It is also one of the largest electricity companies in the world.
Similar to Red Electrica, Iberdrola will also report its full-year results for 2022 on February 22. The consensus EPS forecast for Q4 is €0.16 per share, which is lower than the EPS of €0.18 in the same quarter last year. The forecasted net income for the year is €4.2 billion.
The company has launched its strategic plan for 2023-2025, under which it will invest €47 billion in its network to accelerate its energy transition and end its dependence on fossil fuels. As part of this plan, the company also announced its payout would be around 65%-75% of earnings per share.
Yesterday, analyst Alberto Gandolfi from Goldman Sachs reiterated his Buy rating on the stock. He has a target price of €12.85, which suggests an upside of 18.16%.
What is the Target Price for Iberdrola Stock?
According to TipRanks, IBE stock has a Moderate Buy rating, based on five Buy and four Hold recommendations.
The average target price for IBE is €11.86, which is 9.3% higher than the current price.
Conclusion
Among these two companies, Iberdrola’s stock price is more stable and also has upside potential. The company’s strategic plan also underlines its focus on the sustainable energy model.
Red Electrica remains a good option for value investors and also has projected growth in revenues for 2022.
