Barclays sees Hidroelectrica's shares 13% above current level

Analysts of British bank Barclays set a target price of RON 135 for the shares of the Romanian hydropower group Hidroelectrica, 13% above the current market price, according to Ziarul Financiar quoting a research report published by Bloomberg. The British bank thus revised its target price upwards from RON 130 previously.

The report comes after two other negative reports from Citibank and Morgan Stanley pushed down Hidroelectrica's shares by 9.5% w/w to RON 120.1 on December 24.

Separately, Romanian brokerage house Prime Transaction estimated the intrinsic value of Hidroelectrica's shares at RON 128.8, 7% above the current market price, Bursa.ro reported.

Using the market multiples method, Prime's analysts estimated an intrinsic value of RON 137.4, whereas, through discounted cash flows (DCF), they concluded an intrinsic value of RON 120.2.

"In the case of Hidroelectrica, the multiples related to profit, P/E and EV/EBITDA, are lower than the averages of comparable issuers, while the multiples related to equity, respectively revenues are higher, a situation explained by the very high-profit margin of the company," the report reads.

In the case of evaluation by the DCF method, important differences may appear from the estimate, both in one direction and in the other, the analysts point out.

For last year, Prime assumes that Hidroelectrica obtained a net profit of RON 5.98 billion, which will decrease by 37% this year to RON 3.79 billion. For 2025, analysts estimate a net profit of RON 3.6 billion, which will then exceed the threshold of RON 5 billion in the following three years.

For the current market price (RON 120.1), Hidroelectrica has a market capitalisation of RON 54 billion.

(Photo source: Facebook/Hidroelectrica)