Terna Energy: Long term only (stays BUY)
We have updated our estimates for Terna Energy to account for: 1) the new 330MW Kafireas Project; 2) the disposal of the 138MW Idaho wind park and the acquisition of Bearkat, at 158MW; 3) the completion of the Evoia Project; and 4) its increased capex needs for 2020-22E. Despite the strong rally of 51% ytd, our valuation still yields an attractive 27.5% upside potential, on our new 12M price target (PT) of EUR 14.8/share. We believe Terna Energy remains an attractive story, due to its continuous portfolio expansion, strong cash flow generation and solid track record. By end-2020E, it should have installed capacity of 1.37GW in renewables, with 550MW in the pipeline. On our numbers, the stock trades at a 2020E P/E of 21.5x and 10.8x EV/EBITDA (excluding Tax Equity financial liabilities), with the multiples becoming more competitive after the delivery of the 330MW project in 2022E, as profitability kicks in. We maintain our BUY recommendation on the stock, for investors who seek exposure in Greece with a longer-term investment horizon.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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