WOOD Flash – PGE: new 2030 strategy – more aggressive capex targets
Yesterday (29 August), PGE presented its new strategy until 2030, with more aggressive targets on decarbonisation capex needs, substantially above its previous estimates, from the strategy released in 2020, and with EBITDA evolution also surpassing the former forecasts considerably.We assess the strategy update as neutral, but in line with our recent report, where we have PGE as a BUY-rated stock. In this report, we do not model most of the generation projects envisioned in the strategy, focusing on the “after-the-carve out” portfolio and its value, but note that we expect these projects to be value accretive, providing more upside to our PT, with most of the investments made in the high-margin and stable distribution, RES and heat segments. In the mid-term, we see strong EBITDA growth generated by distribution, before the new generation EBITDA becomes the main contributor, likely after 2030E. In our view, PGE is on a good path to become a well-diversified, green and one of the fastest-growing utilities in Europe. At our current adjusted 2023-25E EV/EBITDAs of 3.2-3.7x, we maintain our view about a re-rating to levels that offer significant upside, while still trading at significant discounts to its EU peers.
PGE Polska Grupa Energetyczna is an electricity company based in Poland. Co. is engaged in the generation and selling of electricity. Co. is a predominant power producer and supplier in Poland and a major heat and power sector company in Central and Eastern Europe. Co. supplies over 5 million households, businesses and institutions through a combination of its own fuel resources (lignite), power generation and final distribution networks. Co.'s activities focus on the following areas: Conventional Power Generation, Renewable Power Generation, Nuclear Power Generation, Wholesale, Distribution and Retail. Co. has 12.2 GW of installed generation capacity.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.