TERNA ENERGY | Reflecting new capacity
We have revisited our model for Terna Energy to reflect an updated capacity expansion program, which includes additional capacity installations in Greece in 2021 as well as a 200 MW park, which Terna Energy acquired earlier in the year and is expected to start contributing in Q4 2019. We have also streamlined expected revenue from the new waste management activities. Our new capacity targets lead to a c. 17% upgrade in Energy Sales & EBITDA from 2020e onwards.On our updated numbers, Terna Energy’s target price is set at €8.4 from €8.0 previously, which implies a >20% total return (including cash distributions). Our methodology effectively values Terna Energy at a c. 9.5x 2020e target EV/EBITDA, broadly in line with European RES Generators on 2020e EV/EBITDA multiples, which is justified in our view, given the group’s increasing capacity outside Greece and the fact that Greek risk associated with ongoing regime changes is being alleviated as said changes take place smoothly and without impacting operational and upcoming capacity.
Terna Energy is a vertically organized renewable energy sources group based in Greece. Co. is mainly engaged in the energy and construction sector. Co. is active in Wind Energy, as well as Hydroelectric Projects, Solar PV and Integrated Management of Waste to Energy and Biomass Projects. Co. is also engaged in the research for the operation and construction of projects related to other renewable energy sources (RES). Co. maintains a class 6 contractor certificate and its activity in the construction sector relates to the construction of private and public projects as a main contractor or subcontractor or through joint ventures.
Eurobank Equities is a Greek-based firm offering research, sales and trading services to institutional, corporate and private clients. The company is wholly owned by Eurobank, one of the 4 systemic banks in Greece.
Research is the backbone of Eurobank Equities' platform, with a team of 4 professionals committed to generating actionable investment ideas by providing timely research products. We are committed to offering value-added services to clients by filtering market noise and providing insights on the multiple sectors that we cover. Our universe includes 26 - large, medium and small cap - companies whose market capitalization amounts to 80-85% of the total market capitalization of the Athens Stock Exchange. Our research team also maintains the capacity to generate ad-hoc research for micro-cap listed companies.
Our team has consistently gained recognition among institutional investors for its quality research, having ranked No. 1 team in Greece at the Extel Surveys of 2013-2016 and 2018. We have also been named Leading Brokerage Firm in Greece over 2014-2016 and in 2018.
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