Ignitis Group: Right place, right time (BUY - initiation of coverage)

We initiate coverage of Ignitis Group (Ignitis) with a BUY rating and a price target (PT) of EUR 28.7/share, implying 35% upside. The company represents an attractive opportunity to invest in the transforming Baltic and Polish energy space, in our view. The EU green deal, added to Lithuania’s aim of becoming energy independent again, through RES capacity growth, puts Ignitis in a very favourable position, in our view. It was listed in October last year and is sufficiently liquid to both grow its EBITDA, mainly through green investments, and pay a generous dividend, at the same time. With a 2020-24E EBITDA CAGR of 6.4% and an average dividend yield of 5.8% over the same period, on our estimates, Ignitis looks very attractive to us. Moreover, in our utilities space, it stands out as an ESG pick, with detailed disclosure and a clear plan for its ESG goals. Ignitis is trading at 2021-23E EV/EBITDAs of 7.3-8.1x and P/Es of 9.5-12.1x, at 27% and 20% discounts vs. its peer group.