Buy Signal on EDP Renovaveis (EDPR-PT)

We had an Enter Long Strategic signal on March 22, 2021, triggered by our system on EDP Renovaveis (EDPR-PT), the Portuguese Renewable Utilities. The stock is in Enter Long Tactical signal since February 25, 2022.

EDPR has a strong track record with a behavorial score of 10/10, therefore we consider the signal as mainly long term.

EDP Renovaveis is a € 22Bn market cap company active in the renewable energy sector. The Company focused on the production of energy from renewable resources. The Company's activities comprise the development, operation and maintenance of such electric power stations as hydroelectric, wind, solar, tidal, biomass and waste plants, among others. It operates in Spain, Portugal, Belgium, France, Italy, Poland, Romania, the United Kingdom, Brasil, the United States, as well as Canada.

The company is expanding its footprint in China, Poland, UK and Latam to tap further growth opportunities. EDPR’s portfolio increased to 12.6 GW with +2.1 GW yoy, and still have 2.9 GW under construction.

EDPR is expected to post a € 2.1 Bn revenue in 2022 (+16.5% yoy) coupled with a 53 % operating margin. Revenue growth is expected to reach double digit in the next 2 years, coupled with a stabilized operating margin at c.53%. The net debt is expected to expand again from 2022 corresponding to the ramping up in renewable capacities.

EDPR is a growth story, within the European Utilities sector, with a critical size and strong quality of assets. The current dividend yield is therefore limited at 0.4%.

Short term catalyst : Capacities ramping up.

This signal looks consistent with the European Renewables Utilities sector in Major Bullish Trend. There is currently 83% of stocks within the sector in bullish tactical signal and 67% in bullish strategic signal.