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Analysts focus on Grenergy for "impressive" growth potential

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The renewable energy sector has started 2021 very volatile and being the center of all eyes, as it already happened in 2020. Grenergy, for example, on Monday it rose more than 5%, on Tuesday it registered a rally of 19%, on Wednesday it fell 7% and this Thursday it fell 1.30%. All this, amid a trickle of recommendations that show analysts trust the company. In fact, they give you an appreciation potential of around 20% on average. mainly because of its "impressive" growth profile, as indicated by CaixaBank. Oddo experts also underline "the strong growth forecast in Spain and continued growth in Chile."

Spain, with 1.1GW, and Chile, with 0.9GW, are the main markets for the energy company. Grenergy aims to enter a new geography, Italy, by the end of the strategic plan. The management aims to reach a cruise speed in installations of 1GW per year.

"Grenergy enjoys a flexible business profile. A combination of 'build-to-sell' (build to sell) and 'build-to-own' (build to own) and a multi-technology approach, with geographic diversification and presence in seven countries ", describe Bestinver experts.

Company sources point out to Bolsamanía that, since the end of last year, turnover has increased -more than 3 million euros per day- and that this has led more analysis houses to look at them. Mirabaud announced this week that it is starting coverage of Grenergy, Solaria, Solarpack and Greenalia in its objective of expanding its analysis of the renewable energy sector. According to the firm, the winning technologies in a market increasingly demanded by investors will be those linked to solar photovoltaic and wind 'offshore'. In Spain, Mirabaud recognizes that there are "a total harmony between companies and regulator", with the National Integrated Energy and Climate Plan that implies an 80% increase in wind power (50 GW in 2030) and tripling photovoltaic power (37 GW in 2030), a process that will last until 2035.

ALL ADVISE 'OVERWEIGHT' OR 'BUY'

Oddo also began this week the coverage of Grenergy and Solaria. For the first has a tip to 'overweight', with a price target of € 52.5, while for the second it recommends 'underweight', with a price of 15.8 euros.

"Grenergy trades at a 10% discount compared to independent renewable energy producers. It has a business model that covers all phases, from development, construction and financial structuring to the sale and / or exploitation of the project", describe from Oddo. "At the end of 2020, it had an installed capacity of 163 MW and a project portfolio of more than 5.0 GW in various stages of development," these experts explain.

CaixaBank raised the target price of Grenergy this week up to 44.10 euros from 25.70 euros, while has reiterated its advice to 'buy'. "There are challenges ahead – execution, price pressure, financing – but the risk / reward seems attractive given the scarcity of 'pure plays', its multi-technology profile, its vertically integrated structure, its geographic exposure and the impressive growth profile." they affirm.

CaixaBank has also improved the price of Solarpack up to 29.50 euros from 16.75 euros, with a 'buy' recommendation.

In another report also released this week, it is Bestinver who improves Grenergy (from the range of 22.5-25.7 euros to 43-44 euros) and reiterates his advice to 'buy'. "We believe that the risk-reward equation remains balanced and that, despite its relative positive behavior, Grenergy offers an attractive valuation to play the solar impulse", he points.

At the end of January, RBC and Alantra Equities they began hedging Grenergy with advice to 'overweight' and 'buy', respectively. The former have a target price of 60 euros and the latter, 37.97 euros, and both also base their assessment on the growth capacity of the company.

"We expect Grenergy to increase its installed renewable capacity from 100MW (Q3 2020) to approximately 4.5GW by 2025. This is supported by its portfolio of projects of more than 5 GW, mainly in Chile and Spain, and by its track record of more than 10 years of developing renewable energy and generating constant value ", RBC emphasizes.

Alantra, for its part, highlights that "commitment (by Grenergy) to the growth of renewable energies, both in Spain and in Latin America", with the support of its solid track record and its portfolio of projects.

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