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Iberdrola (IBDRY)
OTHER OTC:IBDRY
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Iberdrola
(OTC:IBDRY)
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Rating:60Neutral
Price Target:
$97.00
▲(7.43% Upside)
Action:DowngradedDate:03/03/26
The score is driven primarily by mixed financials—improving profitability but pressured by declining revenue, thin/volatile free cash flow, and meaningful leverage. Technicals are moderately supportive, while valuation is fair-to-slightly expensive for the sector but helped by a solid dividend. Earnings call tone and reiterated guidance provide a positive offset, led by strong regulated Networks momentum.
Positive Factors
Regulated Networks Momentum
Sustained double-digit Networks EBITDA growth reflects entrenched regulated cash flows and execution on large transmission/distribution contracts. Regulated earnings are less cyclically exposed, supporting durable EBITDA visibility and funding for capex, dividends and deleveraging over the medium term.
RAB and Investment Momentum
A growing regulated asset base funded by sizable, targeted investments locks in future regulated returns and long-term revenue streams. Continued capex to RAB increases predictable rate-base earnings, strengthening long-term cash generation and competitive positioning in core networks.
Long-term Contracts and PPA Position
High share of long-term contracts and leading PPA market position materially reduces merchant price exposure and secures multi-year cash flows. This structural contracting profile enhances revenue predictability, supports financing for renewables buildout, and lowers earnings volatility over coming years.
Negative Factors
Recent Revenue Contraction
A large recent top-line decline increases uncertainty about sustainable growth and may pressure margins if volume or price recovery stalls. Persistent revenue weakness can constrain reinvestment, slow RAB growth translation, and make earnings targets harder to hit without further network offset.
Thin, Volatile Free Cash Flow
Significantly lower and volatile FCF reduces flexibility to fund capex, repay debt, or absorb project write-downs. Even with strong operating cash, thin FCF limits spare capacity for shareholder returns or unexpected shocks, raising execution risk on the multi-year investment program.
Meaningful Leverage and Interest Pressure
Utility-typical but material leverage increases refinancing and interest-rate sensitivity; higher net financial costs were noted. Elevated debt ratios constrain strategic flexibility, make ratings and financing cost outcomes more binary, and magnify risk if cash flow weakens or rates rise further.
Iberdrola (IBDRY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$154.57B
Dividend Yield3.38%
Average Volume (3M)18.23K
Price to Earnings (P/E)22.5
Beta (1Y)-0.02
Revenue Growth2.21%
EPS Growth-16.95%
CountryUS
Employees44,701
SectorUtilities
Sector Strength65
IndustryDiversified Utilities
Share Statistics
EPS (TTM)0.66
Shares Outstanding1,689,461,400
10 Day Avg. Volume15,637
30 Day Avg. Volume18,235
Financial Highlights & Ratios
PEG Ratio2.85
Price to Book (P/B)2.45
Price to Sales (P/S)2.81
P/FCF Ratio0.00
Enterprise Value/Market Cap1.23
Enterprise Value/Revenue3.43
Enterprise Value/Gross Profit7.03
Enterprise Value/Ebitda9.24
Forecast
1Y Price Target
$88.67Price Target Upside-1.79% Downside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)4.66
Revenue Forecast (FY)$55.24B
Iberdrola Business Overview & Revenue Model
Company DescriptionIberdrola, S.A. engages in the generation, transmission, distribution, and supply of electricity in Spain and internationally. It generates and markets electrical power using renewable sources, such as onshore and offshore wind, hydro, solar photovoltaic, combined cycle gas, nuclear, and biomass, as well as through installation of batteries. The company is also involved in the purchase and sale of electricity and gas on wholesale markets; development of green hydrogen projects; and distribution and sale of gas. It has a total installed capacity of 58,320 MW, including 38,138 MW of renewable installed capacity; and operates 1.2 million kilometers of electricity transmission and distribution lines, as well as serves 36.11 million consumers. In addition, the company offers energy storage, heat pumps, self-consumption, and electric vehicles for residential customers; and management of energy facilities, as well as supplies green H2, industrial heat, etc. to industrial customers. Iberdrola, S.A. was founded in 1840 and is headquartered in Bilbao, Spain.
How the Company Makes MoneyIberdrola generates revenue through multiple key streams, primarily from electricity generation, distribution, and retail services. The company capitalizes on its extensive portfolio of renewable energy assets, which produce electricity that is sold to wholesale markets and directly to consumers. Revenue is also derived from its regulated distribution networks, which charge fees for delivering electricity to end-users. Furthermore, Iberdrola earns income through long-term energy supply contracts, especially in regions where it has established a strong market presence. Strategic partnerships with other companies and investments in international markets enhance its revenue potential. The company's commitment to sustainability and innovation in energy solutions further solidifies its position in the growing renewable energy market, contributing positively to its earnings.
Iberdrola Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call emphasized strong operational and financial momentum driven by the Networks business (robust EBITDA growth, large investments, increased RAB, secured long-term regulated frameworks and pipeline), solid cash generation, deleveraging and progressive shareholder returns. Weaknesses were concentrated in the Power & Customers segment (lower prices, volumes and higher ancillary costs), several one-off write-downs/provisions (renewable pipeline adjustments) and a sharp decline in Mexico's reported EBITDA tied to asset sales. Management maintains positive forward guidance (adjusted profit > EUR 6.6bn for 2026 and aims to exceed prior 2028 targets) and highlights multiple regulatory wins and financing successes that support growth and rating targets.Q4-2025 Updates
Positive Updates
Net Profit Growth
Reported net profit of EUR 6,285 million, up 12% year-on-year; adjusted net profit EUR 6,231 million, up 10.3% and management states EUR 6,749 million excluding EUR 464 million noncash renewable pipeline charges.
Adjusted EBITDA and Networks Strength
Group adjusted EBITDA reached EUR 15,684 million, up 3%; Networks adjusted EBITDA grew 21% to EUR 7,794 million, with transmission EBITDA up 28% to EUR 1.1 billion and distribution EBITDA up 19% to EUR 6.7 billion.
Regulated Asset Base and Investment Momentum
Total investment of EUR 14.46 billion in 2025 with ~2/3 allocated to transmission and distribution; regulated asset base around EUR 51 billion (management highlighted RAB growth vs prior periods) and company emphasized strong network-focused expansion (UK RIIO-T3 TOTEX ~EUR 14 billion).
Capacity Additions and Pipeline
Added 2.7 GW of new operating capacity in 2025, 4.7 GW under construction and a pipeline >9 GW ready for 2028; emission-free generation reached 85%.
Cash Flow, Deleveraging and Credit Metrics
Operating cash flow up 8.2% to EUR 12,811 million; net debt reduced by EUR 1.5 billion to EUR 50.2 billion; FFO/adjusted net debt improved to 25.5%; adjusted net debt/EBITDA around 3x (adjusted net debt-to-EBITDA 3.02x) and adjusted leverage declined to 43.8%.
Dividend and Shareholder Return
Board proposed total dividend of EUR 0.68 per share (year-on-year dividend per share +6.3% and total dividend payments +12% to EUR 4.5 billion, including interim dividend).
Geographic and Business Diversification
International business contributed ~2/3 of EBITDA (UK EUR 3,306m; US EUR 2,662m; Brazil ~EUR 3bn); 81% of group EBITDA now from A-rated countries, supporting resilience and growth.
Commercial Positioning and Long-Term Contracts
All 2026 production sold with an attractive mix of long-term/regulatory contracts (average duration ~14 years); retail customers and long-term PPAs represent ~2/3 of total energy sales; recognized as leading PPA seller in Europe and among top 3 globally.
Financing Execution and Liquidity
EUR 16.7 billion of new financing in 2025, EUR 4.9 billion bonds placed, EUR 4.5 billion structured finance, EUR 3.8 billion credit lines and a EUR 5 billion capital increase — supporting investment plan and rating targets.
Material Regulatory Wins and Project Contributions
Secured UK RIIO-T3 transmission TOTEX (~EUR 14bn), NECEC interconnection commissioning adds ~EUR 125 million EBITDA p.a., Brazil distribution concession renewed for 30 years to 2060 and Neoenergia transmission adds ~EUR 250 million EBITDA p.a.; awarded EUR 1.2bn Victoria (Australia) transmission line.
Negative Updates
Power & Customers EBITDA Decline
Power & Customers adjusted EBITDA fell ~10% (EUR 7.9bn in 2025 vs EUR 8.8bn in 2024 excluding asset-rotation gains) due to lower market prices, volumes and higher ancillary services costs (notably reinforced system operation in Iberia).
Iberia Power Performance and Ancillary Costs
Iberia power EBITDA declined 16.8% to EUR 3,921 million driven by lower margins/sales, higher ancillary services costs, unfavorable court rulings and higher levies despite removal of a 1.2% revenue tax; Iberia-specific regulatory signals limiting O&M and directing CapEx were also noted as constraints.
One-off Adjustments and Renewable Pipeline Write-downs
EUR 464 million of noncash write-offs to adjust renewable pipeline value and ~EUR 460 million provisions in 2025 (management removed these from adjusted metrics); these adjustments reduced reported profit and reflect project-level valuation pressures in some geographies.
UK Power Adjusted EBITDA Pressure (ex divestiture gains)
UK power adjusted EBITDA (excluding a GBP 324 million Smart Meters capital gain) was down 20.8% to GBP 1,212 million due to lower prices, lower volumes in renewables and weaker supply results.
Mexico Reported EBITDA Drop (held for sale)
Mexico EBITDA for illustrative purposes was USD 632 million, a 71% decline year-on-year driven by asset sales and perimeter changes; results are presented as discontinued/held-for-sale in official accounts but represent a material contraction in reported contribution.
Net Financial Costs and Interest Pressure
Net financial costs increased by EUR 288 million in 2025, driven by higher debt-related costs (impact from EUR 6.2 billion higher average net debt contributing ~EUR 357 million), partly offset by FX and derivatives; cost-of-debt improved modestly (6 bps to 4.75%).
Operational/nonrecurring Impacts on Margins
Nonrecurring impacts—such as recognition of past costs (U.S.), sale-related negative P&L items (East Anglia THREE) and storm / blackout-related costs (EUR 350m lower storm cost YoY reducing expenses in 2025 but instability remains)—create volatility in recurring margins and comparability across years.
Regulatory and Political Uncertainty in Spain
Spanish regulatory signals (reduced O&M allowances and more targeted CapEx guidance) introduce near-term constraints for the Iberia business (though Iberia <20% of group RAB, management flagged adaptation and potential margin pressure).
Company Guidance
Management reiterated guidance for adjusted net profit of >€6.6 billion in 2026 (aiming to add ~€1.0 billion in two years) and to exceed the €7.6 billion 2028 target, supported by 2025 results of reported net profit €6.285 billion (adjusted net profit €6.231 billion), adjusted EBITDA €15.684 billion, operating cash flow €12.811 billion (+8.2%), and a regulated asset base ~€51 billion (management cites ~12% y/y growth) after total investment of €14.460 billion (≈2/3 to networks, ~€9bn). Management expects 2026 net debt of €54–55 billion (vs. €50.2 billion at 2025 year‑end), strong credit metrics (FFO/adjusted net debt 25.5%, adjusted net debt/EBITDA ~3.0x), and incremental EBITDA drivers already contracted or announced including NECEC +€125m p.a., Brazil transmission +€250m p.a.; operational build‑out includes 2.7 GW commissioned in 2025, 4.7 GW under construction and ~9 GW ready for 2028.Iberdrola Financial Statement Overview
Summary
Profitability has improved (higher net and EBITDA margins), but recent revenue contraction and weakening/volatile free cash flow reduce financial flexibility. Leverage remains meaningful (debt above equity), increasing sensitivity to rates and refinancing conditions despite utilities’ typically higher debt use.Income Statement
Profitability improved over time with net margin rising from ~10.9% (2020) to ~13.8% (2025) and EBITDA margin expanding to ~36.4% (2025), supporting resilient earnings. However, revenue has been volatile and recently weak: after growth in 2021–2022, sales declined in 2023–2025, including a sharp ~-20.9% drop in 2025, which increases uncertainty around near-term top-line momentum.64
Positive
Balance Sheet
The balance sheet shows consistent profitability on equity at roughly 9.6%–12.1% across 2020–2025, indicating steady returns. Leverage remains a key constraint: debt runs above equity (debt-to-equity ~1.19 in 2025, peaking around ~1.48 in 2023), which is typical for utilities but still elevates refinancing and rate-sensitivity risk despite equity growth over the period.57
Neutral
Cash Flow
Cash generation is mixed. Operating cash flow was solid in most years (roughly 8.1B–12.1B from 2020–2024) but fell to ~8.45B in 2025, while free cash flow is relatively thin and volatile (down to ~1.14B in 2025 from ~4.25B in 2023). Free cash flow covering net income is modest in recent years (about ~17% in 2024) and effectively absent in 2025 based on the provided metrics, highlighting weaker cash conversion and less cushion for dividends, debt reduction, or reinvestment.46
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 55.33B | 43.75B | 44.74B | 49.34B | 53.95B | 39.11B |
| Gross Profit | 27.03B | 11.19B | 23.88B | 23.30B | 20.20B | 17.06B |
| EBITDA | 20.55B | 15.94B | 17.53B | 14.36B | 12.77B | 11.80B |
| Net Income | 6.38B | 6.04B | 5.61B | 4.80B | 4.34B | 3.88B |
Balance Sheet | ||||||
| Total Assets | 157.57B | 160.69B | 158.29B | 150.03B | 154.67B | 141.75B |
| Cash, Cash Equivalents and Short-Term Investments | 3.34B | 6.34B | 4.57B | 3.81B | 7.47B | 5.52B |
| Total Debt | 56.38B | 59.77B | 57.73B | 63.93B | 50.42B | 44.27B |
| Total Liabilities | 98.15B | 97.30B | 97.24B | 89.74B | 96.55B | 85.63B |
| Stockholders Equity | 53.88B | 50.05B | 47.13B | 43.11B | 41.12B | 40.48B |
Cash Flow | ||||||
| Free Cash Flow | 2.48B | 1.14B | 2.05B | 4.25B | 3.66B | 1.19B |
| Operating Cash Flow | 6.62B | 8.45B | 11.93B | 12.13B | 10.44B | 8.11B |
| Investing Cash Flow | -6.01B | -11.30B | -8.40B | -9.69B | -10.15B | -9.49B |
| Financing Cash Flow | -2.21B | 2.69B | -2.27B | -4.09B | 151.00M | 1.87B |
Iberdrola Technical Analysis
Neutral
90.29
Price Trends
89.08
Positive
84.90
Positive
78.75
Positive
Market Momentum
1.54
Positive
51.76
Neutral
49.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IBDRY, the sentiment is Neutral. The current price of 90.29 is below the 20-day moving average (MA) of 93.17, above the 50-day MA of 89.08, and above the 200-day MA of 78.75, indicating a neutral trend. The MACD of 1.54 indicates Positive momentum. The RSI at 51.76 is Neutral, neither overbought nor oversold. The STOCH value of 49.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IBDRY.
Iberdrola Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $7.25B | 9.63 | 13.35% | 12.98% | -0.38% | -53.94% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
63 Neutral | $62.50B | 35.05 | 5.85% | 2.91% | 9.07% | -28.58% | |
60 Neutral | $154.57B | 22.47 | 13.11% | 3.38% | 2.21% | -16.95% | |
59 Neutral | $18.33B | 40.00 | 7.99% | 4.92% | 8.14% | ― | |
54 Neutral | $10.12B | 10.52 | 23.02% | 5.06% | -1.55% | 12.83% |
* Utilities Sector Average
IBDRY
Iberdrola
92.48
36.39
64.87%
BIP
Brookfield Infrastructure
39.68
11.18
39.25%
CIG
Companhia Energetica Minas Gerais
2.28
0.66
40.74%
SRE
Sempra Energy
95.67
27.28
39.89%
AES
AES
14.21
3.98
38.85%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.