Endesa SA (ELE) AI Stock Analysis

• Market Cap: €35.21B
• Dividend Yield: 4.32%
• Average Volume (3M): 731.70K
• Price to Earnings (P/E): 14.8
• Beta (1Y): 0.46
• Revenue Growth: -2.54%
• EPS Growth: 103.14%
• Country: ES
• Employees: 8,948
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 0.78
• Shares Outstanding: 1,058,752,100
• 10 Day Avg. Volume: 720,867
• 30 Day Avg. Volume: 731,700
• PEG Ratio: 0.08
• Price to Book (P/B): 2.72
• Price to Sales (P/S): 1.05
• P/FCF Ratio: 12.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €29.06
• Price Target Upside: -12.63% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 11
• EPS Forecast (FY): 2.13
• Revenue Forecast (FY): €21.70B

• Rating: 66 Neutral
• Price Target: €36.00 ▲(8.24% Upside)
• Action: Reiterated Date: 03/08/26
• Date: Action: Reiterated 03/08/26

The score is driven primarily by mixed financial performance—stronger cash flow and improving leverage offset by weak operating profitability (negative EBIT) and a sharp margin decline. Technicals add support due to a clear uptrend with balanced momentum, and valuation is reasonable given the mid-teens P/E and ~4% dividend yield.

Positive Factors

Cash generation strength

Consistent trailing operating cash flow and mostly positive free cash flow provide durable internal funding for capital expenditures, network maintenance and dividends. Reliable cash generation cushions earnings volatility and supports multi-year investment in renewables and grid resilience.

Improving balance sheet / leverage trend

A lower debt-to-equity position and a stronger equity base versus prior years materially improve financial flexibility. This enduring improvement reduces refinancing risk, aids financing of regulated capex, and positions the company to better absorb rate-setting cycles and investment in the energy transition.

Regulated distribution and diversified business mix

A regulated distribution franchise provides predictable allowed returns and stable cashflows, while exposure to generation and retail diversifies revenue sources. This structural mix reduces reliance on wholesale price swings and supports steady long-term earnings from essential services and customer contracts.

Negative Factors

Weak operating profitability

A sharp gross margin decline and negative EBIT indicate core operating profitability is under stress and that reported net income may rely on non-operating items. Sustained weak operating margins would impair the company's ability to fund investments internally and undermine long-term earnings quality.

Free cash flow coverage gap

FCF covering only ~60% of net income shows earnings are not fully converting to cash, limiting true distributable resources. Over multiple quarters this gap can constrain capex funding, dividend sustainability or debt reduction, forcing more external financing for strategic projects.

Elevated debt and sensitivity to rates/regulation

Meaningful outstanding debt above equity increases exposure to rising interest costs and refinancing risk. Given regulated returns drive revenue recovery, adverse rate settings or higher financing costs could compress returns and limit capacity to finance the energy transition without diluting shareholders or raising tariffs.

Endesa SA Business Overview & Revenue Model

Company Description

Endesa, S.A. engages in the generation, distribution, and sale of electricity primarily in Spain and Portugal. The company generates electricity from various energy sources, such as hydroelectric, nuclear, thermal, wind, and solar. As of December 31, 2021, it distributed electricity to approximately 21 million customers covering a total area of approximately 195,794 square kilometers. The company's distribution and transmission networks consist of 316,506 kilometers. It also sells energy, as well as provides energy related commercial services. In addition, the company engages in installation, maintenance, and repair of home electrical, heating, and air conditioning; trading operations; and investment holding business. Further, it is involved in the supply of electricity and gas to other European markets, including Germany, France, and the Netherlands. Additionally, the company engages in the electric mobility, demand management, and energy storage; exploitation of primary energy resources; provision of industrial services in the areas of telecommunications, water, and gas; electricity transmission business; management, operation, and administration of nuclear plants; issuance of debt instruments; and provision of consultancy and civil engineering services. The company was formerly known as Empresa Nacional de Electricidad, S.A. and changed its name to Endesa, S.A. in June 1997. The company was incorporated in 1944 and is headquartered in Madrid, Spain. Endesa, S.A. is a subsidiary of ENEL Iberia, S.L.U.

How the Company Makes Money

Endesa generates revenue primarily through the sale of electricity to residential, commercial, and industrial customers. Its revenue model is diversified across several key streams: the generation of electricity from a mix of renewable sources (such as wind and solar) and conventional fossil fuel plants, which are sold to the market or directly to consumers. Additionally, the company earns income from the distribution of electricity through its extensive network, which allows it to charge fees for the delivery of power. Endesa also engages in energy trading, optimizing its portfolio to maximize profits from fluctuations in market prices. Partnerships with local and regional governments for energy efficiency projects and renewable energy initiatives further enhance its revenue potential. Regulatory frameworks and subsidies for renewable projects in Europe and Latin America also contribute positively to its earnings.

Endesa SA Financial Statement Overview

Summary

Overall fundamentals are mixed. Cash flow is a relative strength (solid operating cash flow and mostly positive free cash flow), and leverage has improved versus 2022–2023. However, the income statement is the key concern: gross margin fell sharply and EBIT is negative despite positive net income, raising questions about earnings quality and margin normalization.

Income Statement

TTM (Trailing-Twelve-Months) revenue is modestly higher, but profitability quality looks weak: gross margin fell sharply versus prior years and EBIT is negative despite positive net income, suggesting meaningful below-the-line support or non-operating benefits. Longer-term, revenue has been volatile (down in 2023–2024 after a strong 2022), and margins have swung materially, which is not ideal for a regulated utility profile.

Balance Sheet

Leverage remains elevated (debt runs above equity), but the balance sheet has improved versus 2022–2023 with a lower debt-to-equity level and higher equity base. Return on equity is strong in the most recent periods, supporting the capital structure, though the company still carries meaningful debt for a regulated business and remains sensitive to financing costs and regulatory returns.

Cash Flow

Cash generation is a relative strength: TTM (Trailing-Twelve-Months) operating cash flow and free cash flow are solid and free cash flow is positive across most years, with a clear rebound from the 2022 trough. That said, free cash flow growth is negative in the most recent period and free cash flow covers only about ~60% of net income, indicating earnings are not fully translating into cash at the same pace.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.42B	20.93B	25.07B	32.54B	20.52B	16.64B
Gross Profit	1.07B	8.16B	9.10B	9.15B	5.16B	5.07B
EBITDA	798.00M	5.42B	3.49B	5.40B	3.60B	3.34B
Net Income	2.20B	1.89B	742.00M	2.54B	1.44B	1.39B
Balance Sheet
Total Assets	37.48B	37.34B	41.28B	49.96B	39.97B	32.06B
Cash, Cash Equivalents and Short-Term Investments	263.00M	840.00M	2.11B	7.14B	1.58B	1.58B
Total Debt	10.89B	10.58B	13.73B	18.49B	10.38B	4.26B
Total Liabilities	27.87B	28.29B	34.08B	44.20B	34.42B	24.60B
Stockholders Equity	8.52B	8.11B	7.02B	5.56B	5.38B	7.32B
Cash Flow
Free Cash Flow	2.36B	1.72B	2.41B	-460.00M	539.00M	1.25B
Operating Cash Flow	4.20B	3.57B	4.70B	1.67B	2.62B	2.95B
Investing Cash Flow	-2.71B	-1.33B	3.19B	-8.16B	-3.07B	-1.73B
Financing Cash Flow	-1.99B	-3.50B	-6.65B	6.65B	752.00M	-1.04B

Endesa SA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 33.26
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:ELE, the sentiment is Positive. The current price of 33.26 is above the 20-day moving average (MA) of 32.84, above the 50-day MA of 31.59, and above the 200-day MA of 28.52, indicating a bullish trend. The MACD of 0.60 indicates Positive momentum. The RSI at 54.79 is Neutral, neither overbought nor oversold. The STOCH value of 39.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ES:ELE.

Endesa SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTGY	72 Outperform	€23.97B	12.42	22.84%	6.66%	2.66%	1.26%
ENG	67 Neutral	€3.86B	179.64	3.85%	7.01%	5.35%	―
ELE	66 Neutral	€35.21B	14.75	26.20%	4.32%	-2.54%	103.14%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
IBE	62 Neutral	€128.34B	31.54	11.50%	2.92%	0.50%	-19.06%
RED	62 Neutral	€8.01B	16.24	10.14%	4.27%	-23.15%	-39.13%
ANE	52 Neutral	€6.46B	11.10	13.06%	2.02%	2.05%	307.60%