At 15 euros the target price for PPC from JP Morgan with an “overweight” recommendation

PPC recorded a strong finale in 2023, achieving both its operational and financial goals, as reported by JP Morgan, which maintains an “overweight” recommendation with a target price of 15 euros for the stock.

As the US house reports, the group’s installed RES capacity (in operation – large hydro) reached 1.5 GW in March 2024, with a total of 2.8 GW currently under construction and at the “ready-to-build” stage » which corresponds to around 70% of the remaining capacity to reach the RES target by 2026 of 5.5 GW.

At the same time, the management confirmed the prospects for recurring EBITDA at 1.7 billion. euros this year, despite the lowest prices on the wholesale electricity market since the beginning of the year. The house considers the interim guidance set by PPC management as sound and realistic, but based on a business plan that can lead to upward revisions (can lead to further EPS (earnings per share) upgrades) – example the recent agreement with Mytilineos).

JP Morgan is making minimal changes to its estimates at this stage, maintaining its target price at €15. As he notes, the execution of the broader plan remains the “key” for the PPC group, which is well placed in the effort made for further growth.

The analysts also refer to the framework agreement (Cooperation Framework Agreement – CFA) concluded with Mytilineos for the development of a portfolio of photovoltaic projects up to 2 GW in Italy, Bulgaria, Croatia and Romania, with the amount of the agreement reaching 2 billion euros and with an implementation horizon of the next three years. Within the framework of the agreement, Mytilineos will undertake the development and construction of these projects, which will then be acquired by PPC upon completion of their connection to the network of the aforementioned countries.

The deal is consistent and aligned with PPC’s development strategy in Southeast Europe and, according to JP Morgan, offers a relatively cost-effective and low-risk way of entering new regional markets and also enhances the development of the groups’ RES pipeline up to after 2026.

PPC stock trades at a 2025 P/E ratio of 9.5x with an EPS CAGR (average annual growth rate) of 21% for 2023 – 2026 (Bloomberg consensus at 12%) versus integrated European peers (10 ,2x & approx. 2% EPS CAGR) and companies in the RES space (18.6x & approx. 5% EPS CAGR). The ongoing share buyback program will continue to support the shares in the short term, according to JP Morgan (about 5.3% of the total out of 10% equity has been bought back to date).