Elia Group FY26 outlook powered by German unit 50Hz, model update
Elia initiated a strong FY26 outlook for Net Group Profit between EUR 690m and 740m vs. our new estimate of 699m. The outlook is now based on a 10y OLO of 3.2% vs. 3.1% previously and a 10y bund of 2.8% vs. 2.5%. In Germany (50Hz), the outlook is particularly strong thanks to high Capex remuneration and Interest capitalisation. We expect Elia shares to consolidate its strong performance as it has been a good hiding place in the current market uncertainty. Grids have become part of the Datacenter gold-rush and are relatively well insulated from energy price increases. For the next 12 months, we do not expect Elia to raise capital as the Capex plan is skewed toward FY27-28. The next AGM is planned for 19/5 and could ask for permission to increase capital, but rather as an opportunistic potential. We raise our FY26-28 net profit estimates, but maintain our Accumulate rating and €135 target price after the recent multiple expansion.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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