EDF FP – CLOSING HALF – Atomic performance, + 32.2% ABS +23.8% REL

*A lot of the previous upside from the mixed energy business now priced in while renewable future prospects still need to be re-rated
*Detailed reports out that government has reached an agreement dividing it into ‘Blue’ which is the Nuclear along with the Hyrdo business as a subsidiary and then the Green separate
*Reports the government has reached an agreement on the structure of a break-up has now been agreed dividing it into ‘Blue’ which is the Nuclear along with the Hyrdo business as a subsidiary and then the Green
*Talks between EU and France on nuclear price reform closing in 45-50EUR/MWh range for nuclear production inline with expectations
*Main risk being highlighted is opposition from unions

Upside remains decent:
*We have a price target of EUR 14 based on the current mixed energy business, another +12% from here
*EDF cheapest ESG play in Europe if ignoring the Nuclear assets – this will cause large repricing for the renewable businesses post a potential split – as an example EDF trades on a 2 year forward EV/EBITDA multiple of 5.2x while SGRE SM, VWS DC, ORSTED DC all trade around 22x
*While only around 15% of the EBITDA are from Renewables the French investment plan for CAP 30 is to focus more on renewables and hydrogen

  

EDF FP – Reiterate BUY – Atomic opportunity remains, +25% upside remains

Wednesday • 11 November 2020 • 10:01

*We are up +18% since we intitiated the trade and remain long

*News overnight highlights that catalyst underway although little details at this point

*Issue for a breakup scenario has been a lack of agreement between the EU and France – this seems to be underway now

*We see large potential to unlock value in case of a split with the government keeping the Nuclear assets and splitting off the renewables

*EDF cheapest ESG play in Europe if ignoring the Nuclear assets – this will cause large repricing post a potential split – as an example EDF trades on a 2 year forward EV/EBITDA multiple of 5.2x while SGRE SM, VWS DC, ORSTED DC all trade around 22x

*We have a price target of EUR 14

  

EDF – Buy – Nuclear Reform Key for Future

Friday • 02 October 2020 • 10:34

Interesting talk about potential reform on the Nuclear front on EDF FP – we see large value

*We see large potential to unlock value in case of a split with the government keeping the Nuclear assets and splitting off the renewables

*EDF trading very cheap compared to the rest of the ESG / Renewable sector in Europe

*Acquisition in Ireland yesterday also highlights the push to renewables {NSN QHJ2I7MB2SJP <GO>}

*Also stands to benefit from Hydrogen trend – GS says Hydrogen demand over next 25 years could imply need of 1.2tln of investment in the sector

*We have a price target of EUR 14 with a split as a possible catalyst

EDF Climbs on Investor Optmism Over Nuclear Regulation Reform {NSN QHKCP7T1UM12 <GO>}