Terna Energy: strategically positioned (stays BUY)

We have updated our model on Terna Energy, and we reiterate our BUY recommendation on the stock, with an updated 12M price target (PT) of EUR 22.4. The company continues to display strong profitability and consistent deleveraging, leaving room in the balance sheet to finance its heavy investments pipeline. In our view, Terna Energy is strategically positioned to capture the growth in the Greek RES industry, as demanding environmental policies call for a swift transition to green energy generation and consumption at the pan-European level. Despite the notable share price re-rating, on the acquisition speculation, we believe there is still room for investors to capture profits, as the company exhibits significant growth plans in the medium term, targeting capacity of more than 6.0GW by the end of 2029E. On our numbers, the stock is trading at a 2023E P/E of 17.5x and an EV/EBITDA of 12.7x, down notably from the 2022E multiples, on the incremental profitability from the commissioned projects, which are expected to become operational in 2023E. We remain BUYers.