Terna S.p.A. (TRN) AI Stock Analysis

• Market Cap: €18.49B
• Dividend Yield: 4.41%
• Average Volume (3M): 3.58M
• Price to Earnings (P/E): 16.7
• Beta (1Y): 0.24
• Revenue Growth: 10.18%
• EPS Growth: 8.43%
• Country: IT
• Employees: 6,376
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 0.14
• Shares Outstanding: 2,009,992,000
• 10 Day Avg. Volume: 3,751,325
• 30 Day Avg. Volume: 3,582,329
• PEG Ratio: 0.71
• Price to Book (P/B): 2.04
• Price to Sales (P/S): 4.20
• P/FCF Ratio: -13.25
• 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: €8.59
• Price Target Upside: -7.34% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: €10.00 ▲(7.87% Upside)

Terna S.p.A. receives a solid score driven by strong financial performance, characterized by robust revenue growth and profitability. The valuation is reasonable with an attractive dividend yield. Technical analysis presents mixed signals, indicating a neutral market sentiment. The absence of earnings call data and corporate events does not impact the score.

Positive Factors

Sustained revenue growth

Multi-year revenue expansion reflects durable demand for transmission services and successful grid development. Growing top line under a regulated framework supports scale economies, stronger bargaining power with suppliers, and predictable cash inflows that underpin reinvestment and long-term financial planning.

High profitability margins

Very strong gross and net margins indicate efficient cost control and structural pricing power in transmission. Persistent margin advantage versus peers supports robust returns on invested capital, funds available for modernization, and resilience to moderate demand or input-cost shocks over the medium term.

Regulated revenue and stable cash generation

A tariff-regulated business model delivers predictable revenues and reduces volatility in operating cash flows. This structural stability enables multi-year planning for large infrastructure projects, supports dividend commitments, and lowers demand-driven earnings cyclicality typical in unregulated sectors.

Negative Factors

Negative free cash flow from heavy capex

Sustained large-scale infrastructure investment drives recurring negative free cash flow, pressuring liquidity and necessitating external financing or retained earnings to fund growth. Over time this can constrain financial flexibility and elevate reliance on debt or equity issuance for project funding.

Elevated leverage levels

Material leverage is common in utilities but raises sensitivity to interest-rate shifts and refinancing risk. High debt relative to equity limits headroom for incremental borrowing to finance new grid projects and can increase interest expense, reducing incremental returns and operational flexibility over time.

Regulatory dependence and policy risk

Revenue and returns are contingent on regulatory tariff-setting and long-term policy decisions. Structural changes in regulation, tariff methodology, or political priorities could materially alter allowed returns, investment recovery timelines, and the economics of grid modernization initiatives over the medium term.

Terna S.p.A. Business Overview & Revenue Model

Company Description

Terna - Rete Elettrica Nazionale Società per Azioni, together with its subsidiaries, engages in the electricity transmission and dispatching activities in Italy, Euro-area countries, and internationally. The company operates through Regulated, Non-Regulated, and International segments. It is involved in the planning, development, management, operation, and maintenance of national transmission grid, electricity infrastructures, and high-voltage infrastructures. The company also offers telecommunications systems and equipment, connectivity services, energy solutions, and operation and maintenance services. In addition, it designs, produces, commercializes, and repairs power transformers for electricity transmission and distribution grids, industrial transformers for the steel and metals industries, and special transformers for convertors used in electrochemical production; designs, produces, and supplies marine and terrestrial cables; implements and develops renewable energy projects; and undertakes private interconnector projects, as well as owns the national transmission grid. The company was founded in 1999 and is headquartered in Rome, Italy.

How the Company Makes Money

Terna generates revenue primarily through the transmission of electricity over its high-voltage grid, charging fees to electricity producers and distributors for the use of its infrastructure. The company earns significant income from regulated tariffs set by the Italian regulatory authority, which govern the prices it can charge for its services. Additionally, Terna benefits from ancillary services, which are necessary for maintaining grid stability and reliability, and it receives compensation for these services from electricity market participants. Partnerships with other energy companies and investments in renewable energy projects also contribute to its revenue streams, as Terna seeks to enhance its network's capabilities to accommodate a growing share of renewables.

Terna S.p.A. Financial Statement Overview

Summary

Terna S.p.A. demonstrates strong financial health with robust revenue growth, high profitability margins, and effective capital management. The balance sheet is stable, despite high leverage typical of the utilities sector. Cash flow generation is solid, although negative free cash flow due to high capital expenditures should be monitored.

Income Statement

Terna S.p.A. has exhibited strong revenue growth with a steady trajectory over recent years, increasing from €2.32 billion in 2019 to €3.68 billion in 2024. The company maintains high gross and net profit margins, consistently above industry averages, with a gross profit margin of 82.06% and a net profit margin of 28.84% in 2024. This indicates efficient cost management and robust profitability. EBIT and EBITDA margins also reflect solid operational performance. Overall, the income statement shows a positive growth trend and strong profitability.

Balance Sheet

Terna's balance sheet reveals a strong equity position with an equity ratio of 27.68% in 2024, indicating a high level of asset financing through equity. The debt-to-equity ratio stands at 1.84, reflecting significant leverage but is manageable within the utility sector norms. Return on equity is robust at 14.11%, signaling effective use of shareholder funds to generate profits. The balance sheet is stable with a healthy mix of debt and equity financing, though high leverage requires monitoring for potential risks.

Cash Flow

Terna's cash flow statement indicates stable operating cash flows relative to net income, with a ratio of 1.38 in 2024, suggesting strong cash generation capabilities. However, free cash flow is negative due to substantial capital expenditures, which are common in the utilities sector for infrastructure investments. While free cash flow growth is a concern, the company maintains positive operating cash flows, supporting ongoing operations and dividend commitments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.87B	3.65B	3.15B	2.92B	2.57B	2.40B
Gross Profit	1.74B	3.34B	2.58B	2.42B	2.16B	2.06B
EBITDA	2.08B	2.58B	2.11B	2.07B	1.87B	1.80B
Net Income	1.10B	1.06B	885.40M	857.00M	789.40M	785.50M
Balance Sheet
Total Assets	28.08B	27.19B	23.47B	22.83B	22.39B	20.70B
Cash, Cash Equivalents and Short-Term Investments	2.83B	2.74B	1.74B	2.41B	2.55B	3.31B
Total Debt	14.75B	13.86B	12.98B	11.76B	12.42B	12.34B
Total Liabilities	20.55B	19.64B	17.10B	16.63B	17.60B	16.28B
Stockholders Equity	7.51B	7.52B	6.32B	5.15B	4.68B	4.37B
Cash Flow
Free Cash Flow	-1.37B	-1.16B	-963.90M	831.40M	-511.90M	-245.20M
Operating Cash Flow	695.70M	1.47B	1.08B	2.32B	832.30M	941.40M
Investing Cash Flow	-2.40B	-2.40B	-2.33B	-1.86B	-863.30M	-1.39B
Financing Cash Flow	1.07B	1.87B	464.30M	92.50M	-1.05B	2.08B

Terna S.p.A. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:TRN, the sentiment is Positive. The current price of 9.27 is above the 20-day moving average (MA) of 9.09, above the 50-day MA of 8.99, and above the 200-day MA of 8.55, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 58.66 is Neutral, neither overbought nor oversold. The STOCH value of 51.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IT:TRN.

Terna S.p.A. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TRN	72 Outperform	€18.49B	16.72	19.67%	4.41%	10.18%	8.43%
SRG	72 Outperform	€19.61B	14.04	17.62%	5.18%	-8.04%	30.49%
ARN	70 Outperform	€995.71M	11.93	26.22%	3.37%	30.89%	143.25%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
ENI	63 Neutral	€50.05B	18.14	5.51%	6.39%	-5.46%	13.79%

Terna S.p.A. Corporate Events

Terna Secures €200 Million ESG-Linked Credit Line

Terna S.p.A. has secured a 200 million euro credit line from BPER Banca S.p.A, linked to its ESG performance indicators. This move underscores Terna’s dedication to sustainability and strengthens its financial position, emphasizing its strategic focus on creating value through sustainable practices.

The most recent analyst rating on (IT:TRN) stock is a Hold with a EUR8.20 price target. To see the full list of analyst forecasts on Terna S.p.A. stock, see the IT:TRN Stock Forecast page.

Terna S.p.A. Announces 2025 Dividend Advance Payment

Terna S.p.A. announced that its Board of Directors has approved an advance dividend payment for the 2025 financial year, amounting to 0.1192 Euro per share. The payment will commence on November 26, 2025, following the detachment of coupon no. 43. This decision reflects Terna’s commitment to providing returns to its shareholders and may influence investor sentiment positively.

The most recent analyst rating on (IT:TRN) stock is a Hold with a EUR8.20 price target. To see the full list of analyst forecasts on Terna S.p.A. stock, see the IT:TRN Stock Forecast page.

Terna S.p.A. Reports Robust 2025 Financial Performance with Increased Investments

Terna S.p.A. reported strong financial results for the first nine months of 2025, with investments exceeding 2 billion euros, marking a 22.9% increase from the previous year. The company’s strategic focus on renewable energy and infrastructure development has positioned it as a leader in the energy transition, contributing to Italy’s energy independence and sustainability goals.

The most recent analyst rating on (IT:TRN) stock is a Hold with a EUR8.20 price target. To see the full list of analyst forecasts on Terna S.p.A. stock, see the IT:TRN Stock Forecast page.