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Terna S.p.A. Unsponsored ADR (TEZNY)
:TEZNY
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Terna
(OTC:TEZNY)
Rating:73Outperform
Price Target:
$32.00
â–²(6.63%Upside)
Terna (TEZNY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$19.97B
Dividend Yield0.1%
Average Volume (3M)4.85K
Price to Earnings (P/E)17.3
Beta (1Y)0.12
Revenue Growth15.86%
EPS Growth19.97%
CountryUS
Employees6,376
SectorUtilities
Sector Strength78
IndustryRegulated Electric
Share Statistics
EPS (TTM)N/A
Shares Outstanding669,997,300
10 Day Avg. Volume0
30 Day Avg. Volume4,851
Financial Highlights & Ratios
PEG Ratio2.66
Price to Book (P/B)2.25
Price to Sales (P/S)0.00
P/FCF Ratio-10.17
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Terna Business Overview & Revenue Model
Company DescriptionTerna - 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 MoneyTerna generates revenue primarily through the operation and maintenance of its electricity transmission network. The company earns income from tariffs charged for the use of its high-voltage infrastructure, which is regulated by the Italian Regulatory Authority for Energy, Networks, and Environment (ARERA). These tariffs are structured to cover the costs associated with network maintenance, development, and operation, as well as to provide a return on invested capital. Additionally, Terna engages in international projects and partnerships aimed at expanding its capabilities and enhancing cross-border electricity exchanges. The company's focus on innovation and grid modernization helps to accommodate increasing amounts of renewable energy, further reinforcing its revenue streams and strategic position in the energy sector.
Terna Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q1-2025)
| % Change Since: 7.26%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Positive
The earnings call revealed a strong focus on investment in energy transition and infrastructure development, with significant financial and operational achievements. However, there were challenges with increased operating costs and a decline in renewable energy share. Overall, the highlights outweigh the lowlights, indicating a positive outlook.Q1-2025 Updates
Positive Updates
Increased Investment in Energy Transition
Terna updated its industrial plan for 2024-'28, outlining investments totaling EUR17.7 billion, an increase of EUR1.2 billion compared to the previous plan, to drive Italy toward decarbonization and reduce dependency on foreign energy supplies.
Record Regulated Investment
Terna plans to invest EUR16.6 billion in the five-year period to develop and modernize the national electricity transmission grid, marking a historical record level of regulated investment.
Completion of Significant Infrastructure Project
Completion of the first submarine cable of the eastern section of the Tyrrhenian Link, connecting Campania and Sicily, marking progress in major power infrastructure projects.
Strong Financial Performance
Group revenues and EBITDA increased by 5% and 4% respectively, with group net income rising by 3% to EUR275 million.
Robust CapEx Growth
Group CapEx reached EUR562 million, recording a 16% growth versus the first quarter of last year.
Increased Solar Production
Solar production grew to around 7 TWh, up 14% compared to the first quarter of last year.
Improved Credit Rating
Standard & Poor’s upgraded the long-term rating of Terna from BBB+ to single A minus.
Successful Green Bond Issue
Terna issued a EUR750 million green bond to finance projects with environmental benefits.
Negative Updates
Decline in Renewable Energy Share
Renewable sources covered about 33% of national demand, three percentage points lower than last year, due to a decrease in wind and hydroelectric production.
Increased Operating Costs
Total operating costs stood at EUR250 million, 8.5% higher than last year, mainly due to higher raw material costs and service costs in non-regulated activities.
Increased Financial Expenses
Net financial expenses increased slightly to EUR39 million, due to new loans at higher interest rates.
Higher Tax Rate
Taxes stood at EUR119 million, EUR7 million higher versus last year, with a tax rate increase from 29.2% to 30.1%.
Company Guidance
During Terna's first quarter 2025 call, the company outlined several key metrics and strategic directions. Terna plans to invest EUR17.7 billion in its 2024-2028 industrial plan, an increase of EUR1.2 billion from the previous plan, emphasizing its role in Italy's energy transition. In the first quarter, Terna authorized 12 projects worth EUR240 million and completed part of the Tyrrhenian Link project. Financially, group revenues and EBITDA rose by 5% and 4% respectively, with a net income increase of 3% to EUR275 million. The company also reported a CapEx of EUR562 million, a 16% growth from last year. Despite these investments, net debt was slightly reduced to EUR11.1 billion. The company issued a EUR750 million green bond and secured an ESG-linked revolving credit facility of EUR1.8 billion, reflecting its commitment to sustainability. Additionally, Terna's credit rating was upgraded by Standard & Poor's to A- with a stable outlook, and it maintained a strong fixed-to-floating debt ratio of 88%.Terna Financial Statement Overview
Summary
Terna shows strong profitability with robust growth in revenue and efficient operations as reflected in its income statement. However, the balance sheet reveals high leverage, and cash flow analysis indicates challenges with free cash flow, despite strong operational cash generation. Overall, financial performance is solid but requires careful management of leverage and cash flow.Income Statement
Terna demonstrates strong profitability with a consistent increase in revenue over the years. The gross profit margin for 2024 is high, reflecting efficient cost management. The net profit margin has also improved, indicating healthy bottom-line growth. EBIT and EBITDA margins are strong, showcasing operational efficiency. Overall, the income statement reflects robust financial health and growth trajectory.85
Very Positive
Balance Sheet
Terna's balance sheet is characterized by a high debt-to-equity ratio, reflecting significant leverage, which could pose risks in adverse market conditions. However, the company maintains a reasonable equity ratio, indicating a stable financial foundation. The return on equity is impressive, demonstrating effective use of equity to generate profits. Overall, while leverage is a concern, the company's equity position remains solid.72
Positive
Cash Flow
The cash flow statement reveals challenges with free cash flow, which is negative, indicating high capital expenditures. However, operating cash flow is strong relative to net income, showing effective cash generation from operations. The free cash flow to net income ratio is unfavorable, suggesting potential issues with liquidity and reinvestment capabilities. Overall, Terna's cash flow health is mixed, with strengths in operational cash generation but weaknesses in free cash flow.68
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.68B | 3.15B | 2.92B | 2.57B | 2.40B |
| Gross Profit | 3.02B | 2.58B | 2.42B | 2.16B | 2.06B |
| EBITDA | 2.57B | 2.11B | 2.04B | 1.83B | 1.73B |
| Net Income | 1.06B | 885.40M | 857.00M | 789.40M | 785.50M |
Balance Sheet | |||||
| Total Assets | 27.19B | 23.47B | 22.83B | 22.39B | 20.70B |
| Cash, Cash Equivalents and Short-Term Investments | 2.76B | 1.74B | 2.41B | 2.55B | 3.31B |
| Total Debt | 13.86B | 12.98B | 11.76B | 12.42B | 12.25B |
| Total Liabilities | 19.64B | 17.10B | 17.58B | 17.60B | 16.28B |
| Stockholders Equity | 7.52B | 6.32B | 5.15B | 4.68B | 4.37B |
Cash Flow | |||||
| Free Cash Flow | -1.16B | -963.90M | 831.40M | -511.90M | -245.20M |
| Operating Cash Flow | 1.47B | 1.08B | 2.32B | 832.30M | 941.40M |
| Investing Cash Flow | -2.40B | -2.33B | -1.86B | -863.30M | -1.39B |
| Financing Cash Flow | 1.87B | 464.30M | 92.50M | -1.05B | 2.08B |
Terna Technical Analysis
Positive
30.01
Price Trends
29.63
Positive
28.11
Positive
26.20
Positive
Market Momentum
-0.03
Positive
53.65
Neutral
63.80
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TEZNY, the sentiment is Positive. The current price of 30.01 is above the 20-day moving average (MA) of 29.91, above the 50-day MA of 29.63, and above the 200-day MA of 26.20, indicating a bullish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 53.65 is Neutral, neither overbought nor oversold. The STOCH value of 63.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TEZNY.
Terna Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $26.60B | 26.86 | 7.00% | 2.93% | 5.62% | 30.02% | |
75 Outperform | $16.28B | 8.94 | 8.58% | 0.66% | 0.18% | 99.46% | |
75 Outperform | $70.49B | 18.20 | 8.31% | 7.68% | -6.02% | 7.24% | |
73 Outperform | $19.97B | 17.31 | 19.28% | 0.10% | 15.86% | 19.97% | |
73 Outperform | $16.28B | 9.83 | 8.58% | 8.69% | 0.18% | 99.46% | |
70 Outperform | $23.54B | 21.69 | 8.69% | 4.19% | 7.92% | 1.54% | |
67 Neutral | $16.79B | 17.01 | 4.47% | 3.89% | 4.76% | 6.06% |
* Utilities Sector Average
Performance Comparison
TEZNY
Terna
30.01
6.08
25.41%
EBR.B
Centrais Elc Braz Pfb B Elbras
7.76
0.76
10.86%
FE
FirstEnergy
41.08
2.82
7.37%
NGG
National Grid Transco
72.53
13.19
22.23%
PPL
PPL
36.20
8.33
29.89%
EBR
Centrais Eletricas Brasileiras SA - Eletrobras
7.02
0.61
9.52%
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.