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

• Market Cap: €24.59B
• Dividend Yield: 6.66%
• Average Volume (3M): 770.68K
• Price to Earnings (P/E): 12.4
• Beta (1Y): 0.44
• Revenue Growth: 2.66%
• EPS Growth: 1.26%
• Country: ES
• Employees: 6,594
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 0.35
• Shares Outstanding: 969,613,830
• 10 Day Avg. Volume: 1,104,190
• 30 Day Avg. Volume: 770,683
• PEG Ratio: 2.76
• Price to Book (P/B): 2.69
• Price to Sales (P/S): 1.29
• P/FCF Ratio: 10.58
• 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: €26.68
• Price Target Upside: 4.22% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.98
• Revenue Forecast (FY): €18.99B

• Rating: 72 Outperform
• Price Target: €28.00 ▲(9.37% Upside)
• Action: Upgraded Date: 03/04/26
• Date: Action: Upgraded 03/04/26

The score is driven primarily by attractive valuation (low P/E and high dividend yield) and steady profitability. Offsetting these positives are elevated leverage and a multi-year pattern of revenue contraction, while technicals are weaker with the price below key moving averages.

Positive Factors

Diversified regulated business model

A diversified mix of generation, distribution and retail gas/electricity sales plus renewables and project partnerships provides durable, regulated cash flows. This structural diversity reduces reliance on single-market swings and supports steady revenues as the company transitions toward low-carbon assets.

Stable, utility-like profitability

Consistently positive net income and multi-year operating margins typical of regulated utilities create predictable earnings capacity. That stability supports reinvestment, dividend policy and the ability to absorb cyclical commodity swings, underpinning longer-term financial resilience.

Recurring positive free cash flow

Repeated years of positive free cash flow, including particularly strong 2023 and 2025 results, demonstrate the company's ability to generate cash after capex. Durable FCF supports debt servicing, capex for renewables and shareholder distributions when conversion holds.

Negative Factors

Elevated leverage

Meaningful debt relative to equity increases interest-rate and refinancing sensitivity for a capital-intensive utility. Elevated leverage constrains financial flexibility for growth or acquisitions, raises refinancing risk if rates rise, and heightens the need for consistent cash generation to avoid stress.

Multi-year revenue contraction

Persistent top-line decline over multiple years signals structural pressure in core markets or pricing, limiting organic growth. Shrinking revenues make sustaining margins and cash flows harder, reducing headroom for debt reduction, renewables investment, or dividend maintenance over time.

Inconsistent cash conversion and margin pressure

Weak and variable conversion of earnings to cash plus recent margin deterioration undermine the reliability of reported profits for financing needs. Inconsistent cash conversion limits the company's ability to delever, fund capex, or sustain payouts during cyclical stress, increasing structural financial risk.

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

Company Description

Naturgy Energy Group, S.A., together with its subsidiaries, engages in the supply, liquefaction, regasification, transport, storage, distribution, and sale of natural gas. It operates through Energy and Network Management, Renewables and New Business, Supply, and Rest segments. The company engages in the regulated gas and electricity distribution; sale of liquefied natural gas and the sea transport business; management of the gas pipelines and conventional thermal generation facilities; and generation and sale of electricity through wind, mini-hydro, solar, and cogeneration sources, as well as provision of supply management services. It serves in Spain, Argentina, Brazil, Chile, Mexico, Panama, the rest of Latin America, and internationally. The company was formerly known as Gas Natural SDG, S.A. and changed its name to Naturgy Energy Group, S.A. in June 2018. Naturgy Energy Group, S.A. was incorporated in 1843 and is based in Madrid, Spain.

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

Solid, utility-like profitability with consistently positive net income supports the score, but multi-year revenue contraction and 2025 margin pressure are notable headwinds. Cash flow is generally positive yet uneven versus earnings, and elevated leverage remains the key balance-sheet risk.

Income Statement

Profitability is solid and fairly stable for a regulated utility profile: 2025 net margin is ~10% with strong operating profitability (~18% operating margin). However, revenue has been shrinking for several years (down in 2023–2025 after the 2022 spike), and gross margin stepped down meaningfully in 2025 versus 2024, signaling some pressure from costs, mix, or pricing resets. Net income is consistently positive since 2021 (after a 2020 loss), supporting an above-average score despite the soft top-line trend.

Balance Sheet

Leverage is the key constraint: debt runs at roughly 1.7–2.1x equity in 2022–2025 (and was higher in 2021), which is meaningful even for a capital-intensive regulated business. The positive is that equity has been relatively stable and profitability on equity is strong (~20%+ in 2022–2025), and debt-to-equity has improved versus the 2021 peak. Overall, the balance sheet is workable but carries elevated leverage risk if rates rise or cash generation weakens.

Cash Flow

Cash generation is generally supportive, with positive free cash flow in 2020 and 2022–2025 (and especially strong in 2023 and 2025). That said, conversion is not consistently strong: free cash flow has often covered only about half of net income (around ~45–53% in 2023–2025), and operating cash flow relative to accounting earnings is moderate rather than robust. The 2021 negative free cash flow highlights periodic investment or working-capital swings that can pressure shareholder returns in weaker years.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	20.16B	19.45B	19.27B	22.62B	33.97B	22.15B
Gross Profit	7.78B	5.36B	7.70B	7.51B	6.77B	5.62B
EBITDA	4.70B	5.20B	5.22B	5.19B	4.63B	3.74B
Net Income	2.00B	2.02B	1.90B	1.99B	1.65B	1.21B
Balance Sheet
Total Assets	36.51B	39.10B	40.84B	37.89B	40.39B	38.25B
Cash, Cash Equivalents and Short-Term Investments	3.25B	4.66B	6.10B	4.12B	4.39B	4.36B
Total Debt	16.91B	17.88B	18.19B	15.96B	16.26B	16.69B
Total Liabilities	26.75B	27.73B	29.18B	25.96B	30.41B	29.38B
Stockholders Equity	7.78B	9.34B	9.48B	9.45B	7.57B	5.89B
Cash Flow
Free Cash Flow	2.41B	2.38B	1.79B	2.43B	2.16B	-203.00M
Operating Cash Flow	4.63B	4.53B	3.99B	4.86B	2.16B	1.00B
Investing Cash Flow	-2.11B	-1.89B	-1.82B	-2.74B	1.16B	1.90B
Financing Cash Flow	-3.26B	-3.67B	-239.00M	-2.26B	-2.54B	-2.85B

Naturgy Energy Group, S.A. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 25.60
• 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 25.6 is above the 20-day moving average (MA) of 25.51, below the 50-day MA of 25.81, and below the 200-day MA of 26.03, indicating a bearish trend. The MACD of -0.28 indicates Positive momentum. The RSI at 44.97 is Neutral, neither overbought nor oversold. The STOCH value of 44.28 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	72 Outperform	€24.59B	12.42	23.33%	6.66%	2.66%	1.26%
ENG	67 Neutral	€3.94B	179.64	3.85%	7.01%	5.35%	―
ELE	66 Neutral	€37.39B	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	€131.78B	31.54	11.50%	2.92%	0.50%	-19.06%
RED	62 Neutral	€8.13B	16.24	10.14%	4.27%	-23.15%	-39.13%
ANE	52 Neutral	€6.73B	11.10	12.80%	2.02%	2.05%	307.60%