Terna Energy: Blessed child of Aeolus (BUY - initiation of coverage)
We initiate coverage of Terna Energy, the largest renewable energy sources (RES) company in Greece, with a BUY recommendation and a price target (PT) of EUR 6.90/share, offering 32% upside potential. We like Terna for its: i) stable cash flow stream for the next 18+ years, based on its current capacity; ii) continuous revenue growth, followed by successive EBITDA margin improvements; iii) MW portfolio expansion; and iv) attractive valuation, trading at a big discount vs. its peers. Terna is the largest renewables player in the domestic market, achieving a revenue CAGR of c.17.4% in the past four years, coupled with an impressive installed capacity of 442MW, reaching 986MW as of 2017. We believe the positive outlook is likely to continue in the future, with Terna achieving the targeted 2GW portfolio expansion within the next seven years.Terna Energy is a vertically organized renewable energy sources group based in Greece. Co. is mainly engaged in the energy and construction sector. Co. is active in Wind Energy, as well as Hydroelectric Projects, Solar PV and Integrated Management of Waste to Energy and Biomass Projects. Co. is also engaged in the research for the operation and construction of projects related to other renewable energy sources (RES). Co. maintains a class 6 contractor certificate and its activity in the construction sector relates to the construction of private and public projects as a main contractor or subcontractor or through joint ventures.
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.
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