Naturgy Energy Group SA

NTGY: XMAD (ESP)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	€57.50	Rdlz	Jwjfrtn

Naturgy: Raises 2025 EBITDA Target in Line With Our Estimate and Increases Dividend

Tancrede Fulop

Jul 12, 2023

We maintain our fair value estimate of EUR 25 after no-moat Naturgy's board of directors updated the 2021-25 strategic plan by raising its 2025 EBITDA estimate roughly in line with ours, lowered its investments budget in line with our estimate, and raised its dividend floor over 2023-25 by 14% from EUR 1.2 to EUR 1.4 per share, implying a 5.5% yield. By reducing investments and increasing its dividend, the firm switched back to the policies of its 2018-22 plan. Further details on the revised plan will be provided with the first-half results on July 24. At the current share price, we don't see enough margin of safety to buy the shares.

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