Voltalia’s Potential Data Center Partnerships in Brazil: Opportunities and Cautious Outlook

Morgan Stanley analyst Arthur Sitbon maintained a Hold rating on Voltalia today and set a price target of €8.00.

Arthur Sitbon has given his Hold rating due to a combination of factors surrounding Voltalia’s potential involvement in data center projects in Brazil. According to an unconfirmed report, Voltalia is exploring partnerships with major investors like ByteDance and Brookfield Corp, and possibly reaching out to tech giants such as Alphabet and Meta. This initiative could lead to Voltalia providing renewable energy to data centers, potentially securing Power Purchase Agreements (PPAs) that might offer a price premium.
Despite this promising development, Sitbon maintains a cautious outlook due to uncertainties about the nature of these agreements and the broader implications for Voltalia’s business. The potential for these projects to enhance Voltalia’s renewable pipeline in Brazil is seen as a positive signal, yet the existing challenges of high curtailment and low prices in the region temper the overall optimism. Thus, the Hold rating reflects a balanced view, acknowledging both the opportunities and the risks involved.