ANA: 2026 Earnings Cliff Fears Will Drive A More Cautious Outlook

Analysts have nudged their fair value estimate for Acciona up from €161.74 to €166.51, reflecting updated assumptions on discount rate, revenue trends, profit margin, and future P/E after recent downgrades and fresh price targets that highlight concerns about a potential earnings cliff in 2026 and a more cautious stance on the shares.

Analyst Commentary

Recent research has turned more cautious on Acciona, with two downgrades and price targets that sit close to, or below, the updated fair value estimate of €166.51. Analysts are debating how much of the potential earnings risk in 2026 is already reflected in the share price and how much room there is for upside if execution stays on track.

Bullish Takeaways

Bullish analysts point out that published price targets such as €185 still sit above the latest fair value estimate of €166.51. They see this as support for some potential upside if the market regains confidence in the earnings path.
The current fair value uplift from €161.74 to €166.51 reflects updated assumptions on discount rate, revenue trends, profit margin, and future P/E. Supporters view this as justification for maintaining a constructive stance on Acciona’s long term earnings power.
Some observers see the cautious research as already embedding a conservative stance on 2026. In their view, this could limit further downside to valuation if the earnings profile does not weaken as much as feared.
Bullish analysts argue that recent target prices imply investors are being compensated for taking on execution risk around 2026, as they view the shares as already pricing in a fair amount of that risk.

Bearish Takeaways

Bearish analysts highlight the risk of an earnings cliff in 2026. In their view, this justifies lower rating stances and contributes to pressure on valuation multiples such as P/E.
Recent moves from more positive ratings to Hold or Underperform reflect concerns that current pricing already incorporates optimistic assumptions on revenue trends and profit margins.
The €165 price target sits just below the updated €166.51 fair value estimate. This is seen as signaling limited perceived upside and reinforcing a more cautious view on risk or reward at current levels.
For the more cautious camp, the combination of potential 2026 earnings pressure and already full valuations appears to leave less room for disappointment if execution or growth assumptions are not met.

Valuation Changes

The fair value estimate was nudged up slightly from €161.74 to €166.51, a move of about €4.77 per share.
The discount rate was adjusted down modestly from 8.81% to 8.62%, which lifts the present value of projected cash flows.
Revenue growth was revised to a 0.92% decline from a 0.94% decline, indicating a slightly less negative growth outlook in the model.
The net profit margin was kept broadly stable, edging from 2.31% to 2.30%, so profitability assumptions are largely unchanged.
The future P/E was raised slightly from 23.15x to 23.71x, implying a marginally higher valuation multiple in the updated assumptions.

Acciona's strong infrastructure backlog and renewable energy expansion set a foundation for revenue and operating margin growth through large-scale projects.
Geographic and technological diversification in renewables and infrastructure mitigate risks, offering stable revenue and higher margins in the long term.
ACCIONA Energia faces challenges from market volatility, low renewable energy prices, asset dependency, policy risks, and competition, potentially impacting profitability and growth.

Catalysts

About Acciona

Engages in the energy, infrastructure, and other businesses in Spain and internationally.What are the underlying business or industry changes driving this perspective?

ACCIONA's infrastructure backlog reached an all-time high of €54 billion, providing a strong foundation for future revenue growth through large-scale projects and concession awards. This is expected to drive an increase in revenue and operating margins as projects come to fruition.
ACCIONA Energia's addition of 2 gigawatts of capacity in 2024, following 1.7 gigawatts in 2023, highlights a significant expansion of its renewable energy portfolio. New capacity, particularly from the MacIntyre wind farm, is likely to enhance revenue and EBITDA growth as these projects become operational.
Successful asset rotation activities in the energy sector, with proceeds of €1.3 billion so far, are aimed at optimizing the portfolio and unlocking value. This strategy is expected to result in gains that enhance earnings and strengthen the balance sheet.
Nordex's turnaround is evidenced by improved profit margins and a 20% growth in its order book. Its recovery and expansion in the renewables sector position it for stronger net margins and contributions to overall earnings growth.
ACCIONA's focus on geographic and technological diversification in its renewable energy and infrastructure projects mitigates market risks and enhances growth prospects. This strategic positioning is likely to improve revenue stability and contribute to higher margins over the medium to long term.

Acciona Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Acciona's revenue will decrease by 0.8% annually over the next 3 years.
Analysts assume that profit margins will shrink from 3.8% today to 2.4% in 3 years time.
Analysts expect earnings to reach €498.6 million (and earnings per share of €8.14) by about September 2028, down from €832.0 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 21.2x on those 2028 earnings, up from 10.8x today. This future PE is greater than the current PE for the GB Electric Utilities industry at 15.1x.
Analysts expect the number of shares outstanding to grow by 0.14% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.34%, as per the Simply Wall St company report.

Acciona Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The challenging market in Spain during the first half of the year required ACCIONA Energia to revise down their EBITDA expectations, which initially suggests volatility and uncertainty that could negatively impact future revenue generation if such conditions persist.
The issue of historically low prices and new generation paradigms bringing challenges like curtailments in the renewable energy sector might affect the profitability and net margins of ACCIONA Energia in the future.
The rotation of assets as part of a strategy required for refinancing and maintaining investment-grade ratings, particularly in light of high leverage, indicates a dependency on asset disposals for liquidity, which could pressure earnings or net margins if market conditions for asset sales worsen.
Exposure to energy policy volatility in the U.S. and changes in political environments can influence the returns on ACCIONA Energia's investments, potentially impacting revenue or earnings if current policy support for renewable energies declines.
Competition from more mature or oversaturated renewable markets, coupled with potential delays or cost overruns in projects, embodies execution risks that could affect net margins or revenue, particularly if investment returns do not align with expectations in these regions.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €154.118 for Acciona based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €202.0, and the most bearish reporting a price target of just €105.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €21.2 billion, earnings will come to €498.6 million, and it would be trading on a PE ratio of 21.2x, assuming you use a discount rate of 8.3%.
Given the current share price of €165.1, the analyst price target of €154.12 is 7.1% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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