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1. Company Snapshot

1.a. Company Description

Iberdrola, S.A. engages in the generation, transmission, distribution, and supply of electricity in Spain and internationally.It generates and markets electrical power using renewable sources, such as onshore and offshore wind, hydro, solar photovoltaic, combined cycle gas, nuclear, and biomass, as well as through installation of batteries.The company is also involved in the purchase and sale of electricity and gas on wholesale markets; development of green hydrogen projects; and distribution and sale of gas.


It has a total installed capacity of 58,320 MW, including 38,138 MW of renewable installed capacity; and operates 1.2 million kilometers of electricity transmission and distribution lines, as well as serves 36.11 million consumers.In addition, the company offers energy storage, heat pumps, self-consumption, and electric vehicles for residential customers; and management of energy facilities, as well as supplies green H2, industrial heat, etc.to industrial customers.


Iberdrola, S.A. was founded in 1840 and is headquartered in Bilbao, Spain.

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1.b. Last Insights on IBE

Iberdrola's recent performance was driven by a series of positive developments. The company's upgrade to a Zacks Rank #2 (Buy) reflects growing optimism about its earnings prospects. Additionally, Iberdrola's partnership with AWS to leverage AI and optimize energy production has been a significant driver of growth. The company's €5.5 billion profit in 2024, announced in January, further solidified its position in the market. Recent news also highlights Iberdrola's commitment to renewable energy, with the approval of a 315MW offshore wind farm in Germany and a 1,000GWh PPA with Italian retailer Pam Panorama.

1.c. Company Highlights

2. Iberdrola's 2025 Earnings: Strong Growth Across Networks and Power Segments

Iberdrola's 2025 financial performance was marked by a significant increase in adjusted net profit, which rose 10.3% to EUR 6,231 million, while reported net profit reached EUR 6,285 million, up 12%. The company's adjusted EBITDA grew 3% to EUR 15,684 million, driven primarily by a 21% growth in networks. Earnings per share (EPS) came in at EUR 0.1421, in line with analyst estimates. The company's operational performance was robust, with a 12% growth in the regulated asset base to almost EUR 51 billion, supported by total investments of EUR 14.460 billion, with two-thirds allocated to transmission and distribution networks.

Publication Date: Feb -26

📋 Highlights
  • Net Profit Growth:: 2025 reported net profit rose 12% to EUR 6,285 million, with adjusted net profit up 10.3% to EUR 6,231 million.
  • Networks-Driven EBITDA:: Adjusted EBITDA grew 3% to EUR 15,684 million, driven by a 21% surge in networks' EBITDA to EUR 7,900 million.
  • Regulated Asset Expansion:: Transmission/distribution investments of EUR 9 billion boosted regulated asset base by 12% to EUR 51 billion.
  • International Market Cap:: Global footprint now covers 65% of operations in the UK, US, Germany, etc., with market cap exceeding EUR 135 billion (12x 2001 levels).
  • 2028 Guidance Increase:: Adjusted profit guidance raised to over EUR 7.6 billion, supported by EUR 30 billion UK RAB growth by 2030 and EUR 16.7 billion secured financing.

Segmental Performance

The networks segment was a key driver of growth, with adjusted EBITDA increasing 21%. The Power & Customers segment also saw significant activity, with 2.7 gigawatts of new capacity added and 4.7 gigawatts under construction. The company's international expansion continues to transform its business mix, with 65% of its operations now in the UK, US, Germany, France, Brazil, and Australia.

Guidance and Outlook

Iberdrola has set an adjusted profit guidance of more than EUR 6.6 billion for 2026, driven by continued positive trends and new investments. The company's strong operational performance and attractive returns in countries like the US and UK are expected to support this growth. The guidance for 2028 has also been increased to higher than EUR 7.6 billion, driven by increased investment and asset rotation.

Valuation and Dividend

With a current P/E ratio of 24.21 and an EV/EBITDA ratio of 9.02, Iberdrola's valuation reflects its strong growth prospects. The company's dividend yield stands at 2.87%, with a proposed total dividend of EUR 0.68 per share for 2025, representing a 6.3% year-on-year growth. The adjusted net debt-to-EBITDA ratio is 3.02x, indicating a manageable debt position.

Regulatory Developments and Opportunities

Iberdrola is navigating regulatory developments in Spain and the UK, with a focus on adapting to new circumstances while maintaining financial performance. The UK's RIIO-T3 framework provides a stable and attractive environment for transmission investments, with the RAB of transmission expected to reach EUR 30 billion by 2030. The company is also exploring opportunities in renewables and power in the US, with a significant pipeline of projects.

3. NewsRoom

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Iberdrola Expands Australian Footprint With Ararat Wind Farm Acquisition

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Iberdrola Seals Acquisition of 242 MW Wind Farm in Victoria

Mar -09

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Iberdrola acquires 242MW Ararat wind farm in Victoria, Australia

Mar -06

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Iberdrola accelerates growth in Australia with acquisition of first Victorian wind farm

Mar -06

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Plug Power Reports Q4 and Full Year 2025 Results with Strong Sales Growth and Margin Expansion

Mar -02

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Assessing Iberdrola’s Valuation After 2025 Earnings Highlight Networks Strength And 50.41% One Year Return

Feb -26

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Iberdrola SA (IBDRY) Full Year 2025 Earnings Call Highlights: Strong Profit Growth and ...

Feb -25

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UK Drives Iberdrola Profit Growth

Feb -25

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.45%)

6. Segments

Customers

Expected Growth: 4.3%

Iberdrola's clean energy offerings drive growth, as individuals and businesses increasingly prioritize renewable energy sources, reducing carbon footprint and complying with regulations, further boosted by grid expansion and smart grid investments.

Networks

Expected Growth: 4.5%

Iberdrola's Networks segment is poised for growth, driven by increasing demand for electricity in Spain and the UK, coupled with the company's focus on grid modernization and renewable energy integration.

Renewable Energy and Sustainable Generation

Expected Growth: 5.3%

Iberdrola’s commitment to renewable energy, driven by increasing demand for clean power and government incentives, will propel the segment’s growth. The company’s diversified portfolio of wind and hydroelectric power will ensure a stable revenue stream.

Other Business, Corporation and Adjustments

Expected Growth: 5.2%

Iberdrola's growth is driven by increasing demand for renewable energy, expanding electrification of transportation, and strategic investments in digital infrastructure.

7. Detailed Products

Renewable Energy

Iberdrola generates and supplies renewable energy from wind, solar, hydro and biomass sources, reducing carbon emissions and promoting sustainable development.

Electricity Distribution

Iberdrola distributes electricity to millions of customers through its network of power lines, substations and transformers, ensuring reliable and efficient energy supply.

Gas Distribution

Iberdrola distributes natural gas to customers through its network of pipelines, providing a clean and efficient source of energy.

Energy Storage

Iberdrola offers energy storage solutions to customers, enabling them to store excess energy generated from renewable sources and reduce their energy costs.

Electric Vehicle Charging

Iberdrola provides electric vehicle charging infrastructure and services, enabling customers to charge their vehicles efficiently and sustainably.

Energy Efficiency Solutions

Iberdrola offers energy efficiency solutions to customers, helping them to reduce their energy consumption and carbon emissions.

8. Iberdrola, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Iberdrola's main business is the generation and distribution of electricity, which is a essential service. However, there are substitutes such as renewable energy sources and energy efficiency measures that can reduce the demand for electricity.

Bargaining Power Of Customers

Iberdrola's customers are mainly households and small businesses, which have limited bargaining power. The company has a diversified customer base, which reduces the dependence on a single customer.

Bargaining Power Of Suppliers

Iberdrola's main suppliers are fuel providers, equipment manufacturers, and construction companies. The company has a diversified supplier base, which reduces the bargaining power of individual suppliers.

Threat Of New Entrants

The electricity generation and distribution industry has high barriers to entry, including significant capital requirements, regulatory hurdles, and technical expertise. This limits the threat of new entrants.

Intensity Of Rivalry

The electricity generation and distribution industry is highly competitive, with several large players competing for market share. Iberdrola faces intense competition from other utilities and renewable energy companies.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 53.02%
Debt Cost 6.79%
Equity Weight 46.98%
Equity Cost 6.79%
WACC 6.79%
Leverage 112.85%

11. Quality Control: Iberdrola, S.A. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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ENGIE

A-Score: 7.4/10

Value: 7.0

Growth: 5.6

Quality: 3.6

Yield: 9.4

Momentum: 9.0

Volatility: 10.0

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Enel

A-Score: 7.0/10

Value: 5.5

Growth: 5.1

Quality: 4.9

Yield: 8.8

Momentum: 7.5

Volatility: 10.0

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E.ON

A-Score: 6.5/10

Value: 7.2

Growth: 4.8

Quality: 3.2

Yield: 6.9

Momentum: 7.5

Volatility: 9.3

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RWE

A-Score: 6.5/10

Value: 7.4

Growth: 5.3

Quality: 3.7

Yield: 5.0

Momentum: 9.0

Volatility: 8.3

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Iberdrola

A-Score: 6.3/10

Value: 3.7

Growth: 5.4

Quality: 4.6

Yield: 6.2

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

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SSE

A-Score: 5.9/10

Value: 5.2

Growth: 4.9

Quality: 4.2

Yield: 6.2

Momentum: 8.0

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.12$

Current Price

19.12$

Potential

-0.00%

Expected Cash-Flows