Iberdrola (BME:IBE) Valuation in Focus After Renewable Hydrogen Deal With IFF

Iberdrola (BME:IBE) is gaining attention after partnering with IFF to provide renewable electricity for a new green hydrogen plant at IFF’s fragrance ingredients facility in Spain. This collaboration highlights Iberdrola’s growing presence in industrial decarbonization initiatives.

See our latest analysis for Iberdrola.

Iberdrola’s headline-grabbing push into green hydrogen comes as its stock shows clear momentum, with a 7.3% 1-month share price return and 32.8% share price return year-to-date. Over the past 12 months, total shareholder return reached an impressive 39%, and gains appear even more pronounced over three and five years. This suggests that investors are rewarding the company’s strategic evolution toward renewables and decarbonization partnerships.

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With shares climbing sharply over the past year, the question now is whether Iberdrola is trading at a discount given its strong fundamentals, or if the recent momentum means future growth is already reflected in its price.

Most Popular Narrative: 7.2% Overvalued

Analyst estimates put Iberdrola's fair value at €16.82, which is 7.2% below the last close of €18.04. This suggests the stock is priced ahead of narrative forecasts. Here is what’s driving that view according to the most widely followed narrative:

Major expansion of regulated network investments in the US and UK, supported by stable and attractive policy frameworks and recently approved regulatory determinations, is expected to nearly triple Iberdrola's regulated asset base to €90bn by 2031. This should drive sustained, predictable growth in revenues and a structural increase in regulated net margins.

Read the complete narrative.

Want to know how these bold expansion plans power this heady share price? The secret sauce in this narrative hinges on ambitious growth targets and profit multiples usually reserved for the world’s most coveted energy firms. Wondering what assumptions tip the balance and send valuation soaring? Click through for the inside story behind these eye-catching numbers.

Result: Fair Value of €16.82 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Iberdrola's heavy dependence on supportive regulation and its ambitious funding needs mean that any shift in policy or market appetite could quickly challenge growth assumptions.

Find out about the key risks to this Iberdrola narrative.

Build Your Own Iberdrola Narrative

If you see the story taking a different turn or want to dive deeper into the numbers yourself, shaping your own Iberdrola narrative takes just a few minutes. Do it your way.

A great starting point for your Iberdrola research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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