Naturgy Energy Group, S.A. (NTGY) AI Stock Analysis

• Market Cap: €21.64B
• Dividend Yield: 6.74%
• Average Volume (3M): 770.68K
• Price to Earnings (P/E): 11.9
• Beta (1Y): 0.47
• Revenue Growth: 2.66%
• EPS Growth: 1.26%
• Country: ES
• Employees: 6,594
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 0.57
• Shares Outstanding: 969,613,830
• 10 Day Avg. Volume: 1,104,190
• 30 Day Avg. Volume: 770,683
• PEG Ratio: -3.49
• Price to Book (P/B): 2.37
• Price to Sales (P/S): 1.17
• P/FCF Ratio: 12.51
• 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: €26.27
• Price Target Upside: 5.93% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: €29.00 ▲(16.94% Upside)

Naturgy Energy Group's overall stock score is driven by its strong financial stability and attractive valuation, particularly its zero debt and high dividend yield. However, the declining revenue and free cash flow present challenges that need addressing to sustain long-term growth. The technical analysis indicates a neutral market sentiment, neither strongly bullish nor bearish.

Positive Factors

Strong Margins

Naturgy's strong gross profit margin indicates effective cost management, which supports profitability and competitive positioning in the energy sector.

Debt-Free Balance Sheet

A debt-free balance sheet reduces financial risk and enhances financial flexibility, allowing Naturgy to invest in growth opportunities without the burden of interest payments.

Cash Generation

Strong cash generation relative to net income ensures Naturgy can support operational needs and invest in strategic initiatives, bolstering long-term sustainability.

Negative Factors

Declining Revenue

A declining revenue trend poses a challenge to growth and profitability, potentially impacting Naturgy's ability to maintain its market position and invest in future projects.

Free Cash Flow Decline

The decline in free cash flow limits Naturgy's ability to fund capital expenditures and return capital to shareholders, potentially affecting long-term growth prospects.

Net Profit Margin Pressure

Pressure on net profit margins indicates challenges in maintaining profitability amid declining revenues, which could affect Naturgy's financial health and shareholder returns.

Naturgy Energy Group, S.A. Business Overview & Revenue Model

Company Description

Naturgy Energy Group, S.A. is a leading Spanish multinational company engaged in the energy and utilities sector. The company operates primarily in the generation, distribution, and commercialization of electricity and natural gas. Naturgy is involved in renewable energy projects, conventional energy generation, and provides energy solutions to both residential and business clients. With a strong presence in various international markets, Naturgy focuses on sustainable energy practices and aims to transition towards a low-carbon economy.

How the Company Makes Money

Naturgy generates revenue through multiple key streams, primarily from the sale of electricity and natural gas to residential, commercial, and industrial customers. The company operates a diversified portfolio of energy generation assets, including renewable sources such as wind and solar, which contribute to its earnings through power sales. Additionally, Naturgy earns revenue from the distribution of electricity and gas, which involves charges for infrastructure usage. Significant partnerships with governments and other entities for renewable energy projects also bolster its revenue, particularly as the global demand for sustainable energy solutions increases. Furthermore, the company benefits from regulatory frameworks and incentives aimed at promoting clean energy, which further enhances its financial performance.

Naturgy Energy Group, S.A. Financial Statement Overview

Summary

Naturgy Energy Group presents a financially stable profile with strong gross and EBIT margins, zero debt, and robust equity levels. However, declining revenue and free cash flow highlight potential challenges in sustaining growth and profitability. The company demonstrates strong cash generation capabilities, yet must focus on reversing revenue declines to ensure long-term financial health.

Income Statement

Naturgy Energy Group shows a mixed performance in its income statement. The gross profit margin for 2024 is approximately 40%, indicating a strong ability to manage costs. However, there is a declining revenue trend from 2022 to 2024, with a notable revenue decrease of around 15% from 2023 to 2024. The EBIT margin stands at 18%, and the EBITDA margin at 27%, both reflecting solid operational efficiency. Despite these strengths, the net profit margin reduced slightly from 8.8% in 2023 to 9.9% in 2024, reflecting challenges in maintaining net income levels amid revenue declines.

Balance Sheet

The balance sheet of Naturgy Energy Group reflects a strong equity position with an equity ratio of 23% for 2024, indicating a stable financial structure. The company has eliminated its total debt, resulting in a debt-to-equity ratio of 0, which mitigates financial risk. The return on equity (ROE) for 2024 is approximately 20%, showcasing effective utilization of shareholder funds to generate profits. Overall, the balance sheet indicates a robust financial position with minimal leverage risk.

Cash Flow

The cash flow statement indicates a decline in free cash flow from €2.43 billion in 2023 to €1.79 billion in 2024, marking a decline in free cash flow growth. The operating cash flow to net income ratio of 2.1 demonstrates strong cash generation relative to net income. However, the free cash flow to net income ratio has decreased, reflecting reduced cash available after capital expenditures. Despite these challenges, the company's cash flow generation remains adequate, supporting its operational needs.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.16B	19.27B	22.62B	33.97B	22.15B	15.35B
Gross Profit	7.78B	7.70B	7.51B	6.77B	5.62B	5.01B
EBITDA	4.70B	5.22B	5.19B	4.63B	3.74B	2.02B
Net Income	2.00B	1.90B	1.99B	1.65B	1.21B	-55.00M
Balance Sheet
Total Assets	36.51B	40.84B	37.89B	40.39B	38.25B	39.55B
Cash, Cash Equivalents and Short-Term Investments	3.25B	6.10B	4.12B	4.39B	4.36B	4.49B
Total Debt	16.91B	18.19B	15.96B	16.26B	16.69B	17.35B
Total Liabilities	26.75B	29.18B	25.96B	30.41B	29.38B	28.28B
Stockholders Equity	7.78B	9.48B	9.45B	7.57B	5.89B	8.03B
Cash Flow
Free Cash Flow	2.41B	1.79B	2.43B	2.16B	-203.00M	1.96B
Operating Cash Flow	4.63B	3.99B	4.86B	2.16B	1.00B	3.43B
Investing Cash Flow	-2.11B	-1.82B	-2.74B	1.16B	1.90B	-1.14B
Financing Cash Flow	-3.26B	-239.00M	-2.26B	-2.54B	-2.85B	-388.00M

Naturgy Energy Group, S.A. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 24.80
• 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:NTGY, the sentiment is Negative. The current price of 24.8 is below the 20-day moving average (MA) of 25.95, below the 50-day MA of 26.25, and below the 200-day MA of 25.67, indicating a bearish trend. The MACD of -0.51 indicates Positive momentum. The RSI at 36.14 is Neutral, neither overbought nor oversold. The STOCH value of 23.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ES:NTGY.

Naturgy Energy Group, S.A. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTGY	71 Outperform	€21.64B	11.86	22.84%	6.74%	2.66%	1.26%
IBE	67 Neutral	€120.24B	21.10	11.50%	2.94%	0.50%	-19.06%
ANE	66 Neutral	€7.08B	9.47	13.06%	1.64%	2.05%	307.60%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
ELE	63 Neutral	€32.84B	14.87	26.20%	4.32%	-2.54%	103.14%
ENG	55 Neutral	€3.45B	36.75	3.85%	6.99%	5.35%	―
RED	52 Neutral	€8.11B	22.07	10.14%	4.31%	-23.15%	-39.13%