Ignitis Group: steady as she goes (stays BUY)
We reiterate our BUY on Ignitis and increase our 12M price target (PT) to EUR 26.8/share. We continue to like the company’s stable business model and high earnings predictability: RES operates under fixed-priced PPAs/CfDs, while both the Networks and Reserve Capacities segments are highly regulated. Following a period of elevated investments in 2023-25 (c.EUR 2.5bn), which increased RES capacity from 1.2 GW to 2.1 GW, we expect lower capex in 2026E (EUR 599m, at the lower bound of the guidance). Together with further asset rotation (following the sale of a 49% stake in Vilnius CHP), this may support deleveraging and potentially higher dividend payments. However, we conservatively assume the minimum dividend growth under the current policy, implying 6.6-7.0% yields in 2026-28E. Ignitis is trading at our 2026-28E EV/adjusted EBITDAs of 6.2-6.6x and P/Es of 5.3-7.0x, implying c.25% and c.58% discounts vs. its peers, respectively. Despite its structurally lower liquidity and a historical discount, we believe the current valuation gap is excessive.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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