On Friday, Citi reiterated its Sell rating on Iberdrola (BME:IBE) SA (IBE:SM) (OTC: OTC:IBDRY) stock with a steady price target of EUR9.60. The firm's analysis comes ahead of the company's scheduled earnings report for the third quarter and first nine months of the year, which is to be released on October 23rd before the market opens.
According to the analyst's forecasts, the inclusion of one-off benefits is expected to positively impact the results. These benefits, amounting to approximately €100 million, stem from a legal case victory in Spain and will contribute to the Spain Generation, Supply and Renewables division's performance. This is in addition to €262 million already booked in the first half of the year.
Despite these one-time gains, Iberdrola's earnings continue to be affected by ongoing losses due to cable issues at its East Anglian offshore wind assets, which have persisted from the second quarter into the third. These issues have led to a loss of earnings for the company.
Looking forward, Citi anticipates that Iberdrola will maintain its full-year 2024 net income guidance, which forecasts double-digit growth. It is important to note that this guidance does not take into account capital gains from asset rotation but does include the one-off legal case benefits from Spain, which could total close to €360 million at the end of the first nine months.
The market is also awaiting comments from Iberdrola regarding the current political climate in Spain and the proposed extension of a 1.2% revenue tax, including any potential measures to offset investments related to this tax.
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