AlphaValue/Baader Europe Sees 'Limited' Upside for Verbund Amid Revenue Cap, Expected Hydro Normalization
AlphaValue/Baader Europe raised its price target for Verbund (VER.VI) to 61 euros from 59.7 euros, as the research firm noted "limited" upside due to state revenue levies and anticipated hydro output normalization."We believe Verbund remains particularly resilient given its lack of gas exposure, making it a potential clear winner. That said, we expect upside to remain capped by two factors: i) the Electricity Energy Crisis Contribution (EKB-S), in place through 2030, which effectively caps revenues from existing generation above [EUR90 per megawatt-hour] through a 95% levy, limiting the ability to capture upside from peak-load spreads; and ii) a return to more [normalized] hydro conditions following an exceptionally dry summer in Austria," analysts said Thursday.On the earnings side, the research firm lifted its full-year 2027 EPS forecast by 5.12% to 3.77 euros, after a recent rise in European gas prices boosted short- and medium-term forward power prices. The revision incorporates a higher achieved hydro power price assumption of 90 euros per megawatt-hour, compared with 85 per megawatt-hour previously.AlphaValue/Baader Europe has a reduce rating on the stock.
