ENAGÃS: RESILIENCE AND UNDERPERFORMANCE VS. REE; CHANGE OF RECOMMENDATION TO BUY (ANÃLISIS BANCO SABADELL)
We change our recommendation to BUY. Resilience and underperformance vs. sector. T.P. € 23.38/sh. (+25% upside).Even though 84% of ENAG’s EBITDA stem from regulated activities with guaranteed return, we cut EPS’20 by -3.1% and -1.7% in recurring terms and our T.P. by -1.1% to € 23.38/sh. (+25% upside). We do not foresee a revision of DPS’20 (€ 1.68/sh.; +5% vs. 2019/9% yield/100% payout) despite its high debt level (3.8x NFD/EBITDA) for three reasons: liquidity position (72% NFD), low cost of debt (2.1%) and few maturities (3.3% NFD in 2020 and 3.5% in 2021). Despite its good performance (+7% vs. IBEX from Feb’20 highs), it has underperformed its best peer, Red Eléctrica, by -8%. At current levels, it is pricing in an EPS revision of much as -15%.
Enagas is a gas transportation company based in Spain. Co. is engaged in the technical distribution and storage of gas through pipelines as well as the provision of regasification services. Co. and subsidiaries are engaged in the ownership, administration, storage, pipeline transportation, distribution flow, and sale of natural gas. As a transport company, Co. also provides gas and manages the gas infrastructures.
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