ENCE Energia y Celulosa (ENC) AI Stock Analysis

• Market Cap: €573.93M
• Dividend Yield: 4.84%
• Average Volume (3M): 384.46K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.57
• Revenue Growth: -11.51%
• EPS Growth: -170.43%
• Country: ES
• Employees: 1,245
• Sector: General
• Sector Strength: N/A
• Industry: Paper, Lumber & Forest Products
• EPS (TTM): -0.14
• Shares Outstanding: 246,272,490
• 10 Day Avg. Volume: 378,882
• 30 Day Avg. Volume: 384,458
• PEG Ratio: 0.04
• Price to Book (P/B): 1.25
• Price to Sales (P/S): 0.80
• P/FCF Ratio: -14.08
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): -0.08
• Revenue Forecast (FY): €804.17M

• Rating: 48 Neutral
• Price Target: €2.50 ▲(0.81% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is held down primarily by weak financial performance (recent losses, negative gross profit, higher leverage, and negative free cash flow). Technical indicators are moderately constructive in the near term, and valuation is mixed with a supportive dividend yield but a negative P/E due to losses.

Positive Factors

Diversified business model

ENCE's dual revenue streams — industrial pulp sales and biomass-based electricity — provide structural diversification across product and energy markets. This reduces single-market exposure, helps smooth cash flows across cycles, and supports resilience versus pure-play peers over a multi‑quarter horizon.

Sustainability and resource advantage

A commitment to sustainably managed forests and circular‑economy practices is a durable competitive asset as buyers and regulators favour low‑carbon inputs. This supports stable feedstock access, premium demand from eco-conscious customers, and regulatory alignment that can lower long‑term compliance risk.

Positive operating cash flow and sizable asset base

Sustained positive operating cash flow in recent years provides a baseline for funding operations and working capital needs despite profit swings. Coupled with a sizable asset base, this gives the company tangible recovery options and collateral for financing, supporting medium‑term operational continuity.

Negative Factors

Profitability deterioration

Recent swings to negative gross profit and net loss indicate the company's earnings are volatile and sensitive to cyclical pressures. Persistent weak profitability erodes retained earnings, limits internal investment capacity, and raises the bar for consistent recovery across multiple quarters.

Rising leverage

Higher debt relative to equity reduces financial flexibility and elevates refinancing and interest burden risk. If profitability and cash generation do not meaningfully recover, elevated leverage can limit strategic options, raise borrowing costs, and constrain investment or dividend policy over the medium term.

Negative free cash flow in 2025

A move to negative free cash flow signals that operating cash is insufficient to cover capital expenditures and other uses without drawing on reserves or external financing. This constrains de‑leveraging, capital investment and increases reliance on markets or banks if weak cash conversion persists.

ENCE Energia y Celulosa Business Overview & Revenue Model

Company Description

ENCE Energía y Celulosa, S.A., together with its subsidiaries, produces and sells eucalyptus pulp and renewable energy in Spain, Germany, Poland, Italy, France, the United Kingdom, Turkey, Sweden, Romania, Netherlands, Austria, and internationally. It offers bleached eucalyptus kraft pulp; and forest land management and forestry services, as well as produces renewable energy using forestry and agricultural biomass sources. The company also purchases and sells timber. It manages 61,631 hectares of forest. The company was formerly known as Grupo Empresarial ENCE, S.A. and changed its name to ENCE Energía y Celulosa, S.A. in April 2012. ENCE Energía y Celulosa, S.A. was founded in 1957 and is headquartered in Madrid, Spain.

How the Company Makes Money

ENCE generates revenue through multiple key streams. The primary source of income comes from the sale of cellulose pulp, which is used in various paper products. The company also earns significant revenue from the production and sale of renewable energy, primarily generated from biomass sources. Additionally, ENCE engages in the sale of electricity produced in its biomass power plants, contributing to its overall earnings. Partnerships with forestry companies and pulp consumers ensure a steady supply chain and market for its products. The company's commitment to sustainability and renewable resources also aligns with growing global demand for eco-friendly products, further enhancing its revenue potential.

ENCE Energia y Celulosa Financial Statement Overview

Summary

Income statement weakness drives the score: profitability deteriorated sharply, with 2025 turning loss-making and showing negative gross profit alongside a steep revenue drop. Leverage has risen (debt-to-equity ~1.36 in 2025) as equity fell, reducing financial flexibility. Operating cash flow stayed positive in 2024–2025, but 2025 free cash flow was meaningfully negative, limiting de-leveraging capacity.

Income Statement

Profitability has been volatile and recently deteriorated. After a solid 2022 (strong margins and positive earnings), results weakened in 2023 and turned clearly negative again in 2025 (annual): gross profit and net income were both negative, and revenue fell sharply versus the prior year. The main strength is that the business has shown it can produce strong earnings in favorable cycles (notably 2022), but the key weakness is the lack of consistency and the steep swing back to losses and negative gross margin in the latest period.

Balance Sheet

Leverage is meaningful and has increased versus the stronger 2022 position. Total debt rose to 651.0M in 2025 while equity declined to 477.2M, pushing debt-to-equity up to ~1.36 (from ~1.04 in 2024 and ~0.47 in 2022). The balance sheet benefits from a sizable asset base (total assets ~1.64B in 2025), but higher leverage combined with recent losses reduces financial flexibility and raises risk if weak profitability persists.

Cash Flow

Cash generation is mixed: operating cash flow remained positive in 2024–2025 (50.2M in 2025), but free cash flow turned meaningfully negative in 2025 (-42.4M) and weakened versus 2024. The company produced very strong cash flows in 2022, but the more recent profile points to heavier cash demands and less room to de-lever or self-fund investment, especially alongside net losses.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	747.30M	870.44M	829.60M	1.00B	819.67M
Gross Profit	-105.40M	477.09M	403.81M	612.64M	412.83M
EBITDA	72.10M	179.05M	105.96M	373.60M	-70.98M
Net Income	-54.50M	31.55M	-24.72M	247.22M	-190.41M
Balance Sheet
Total Assets	1.64B	1.68B	1.70B	1.78B	1.61B
Cash, Cash Equivalents and Short-Term Investments	230.00M	277.50M	335.54M	414.97M	380.28M
Total Debt	651.00M	545.59M	630.30M	326.13M	478.31M
Total Liabilities	1.07B	1.06B	1.05B	962.17M	987.45M
Stockholders Equity	477.20M	525.57M	534.06M	700.89M	512.66M
Cash Flow
Free Cash Flow	-42.40M	1.74M	-141.86M	248.81M	70.31M
Operating Cash Flow	50.20M	78.60M	-46.13M	303.68M	141.29M
Investing Cash Flow	-96.90M	-104.84M	-96.03M	-53.90M	-65.35M
Financing Cash Flow	100.00K	-42.84M	62.27M	-216.83M	-218.59M

ENCE Energia y Celulosa Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:ENC, the sentiment is Negative. The current price of 2.48 is above the 20-day moving average (MA) of 2.46, above the 50-day MA of 2.37, and below the 200-day MA of 2.64, indicating a bearish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 42.81 is Neutral, neither overbought nor oversold. The STOCH value of 21.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ES:ENC.

ENCE Energia y Celulosa Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IBG	69 Neutral	€223.27M	17.38	3.84%	4.24%	-8.26%	-53.40%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
ENC	48 Neutral	€573.93M	-10.95	-5.36%	4.84%	-11.51%	-170.43%