Elia Group Brace yourself for a 2023 pitstop
In their 3Q Trading Update, Elia Group surprised the market with the early release of their '23-'27 investment plans. They are planning to invest close to €16bn over the next 5 years, blowing our estimates (KBCSe: €11bn) out of the water. While fundamentally positive for the case, the valuation of the share suffers a compression of value creation with the rise in discount rates outpacing their allowed equity remuneration. Although we continue to be a strong believer in Elia Group as a company - with incredibly promising growth prospects, a track-record of operational excellence and top-notch management – we are urged to stick to our ‘Hold'-rating and set the target price at €132.Elia System Operator develops, operates and maintains very-high-voltage (380 kV, 220 kV and 150 kV) and high-voltage (70 kV, 36 kV and 30 kV) networks, providing its customers with consultancy and engineering services. Whether in Belgium, Germany or elsewhere in Europe or the U.S., Co. ensures that electricity flows reliably from energy producers to distributors and large corporate customers. Co.'s main activities include transmission operator, system operator and market facilitator, developing and maintaining grid infrastructure, connecting electrical installations to grids, providing transparent access to grids, while taking initiatives to improve electricity market operations.
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