Iberdrola’s Green Hydrogen Deal With IFF Might Change The Case For Investing In Iberdrola (BME:IBE)

• IFF recently announced the installation of a nature-based hydrogen production facility at its Benicarló plant in Spain, using renewable electricity supplied by Iberdrola under a 10-year agreement to produce clean hydrogen for fragrance ingredient manufacturing.
• This partnership represents the fragrance industry's first use of green hydrogen for production processes, directly supporting both companies' decarbonization targets and helping to eliminate 2,000 tons of carbon dioxide emissions annually.
• We'll now explore how Iberdrola’s entry into green hydrogen supply for industrial clients may influence its long-term earnings outlook.

AI is about to change healthcare. These 32 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.

Iberdrola Investment Narrative Recap

Investing in Iberdrola means believing in the structural growth of green energy infrastructure and regulated electricity networks, underpinned by stable demand and decarbonization trends. While the recent supply agreement with IFF highlights Iberdrola’s capability to serve industrial clients in emerging sectors like green hydrogen, this development is not expected to materially influence the most important short-term earnings driver, which remains regulatory clarity and margin delivery across core networks. However, it also does not significantly mitigate the biggest risk, the company's heightened exposure to regulatory and policy shifts in its key markets.

Among recent announcements, the successful €5 billion equity raise stands out as most relevant, ensuring Iberdrola has the capital needed to fund accelerated investments in grids and clean energy projects. This funding supports the company's ambition to expand its regulated asset base, but also underscores a continuing dependence on capital market conditions and regulatory approval for sustained growth.

In contrast, investors should be aware that heightened exposure to regulatory risks and policy changes in Spain and other core markets could...

Read the full narrative on Iberdrola (it's free!)

Iberdrola's narrative projects €50.1 billion revenue and €7.0 billion earnings by 2028. This requires 3.7% yearly revenue growth and a €2.2 billion earnings increase from €4.8 billion today.

Uncover how Iberdrola's forecasts yield a €16.82 fair value, a 5% downside to its current price.

Exploring Other Perspectives

Ten individual fair value estimates from the Simply Wall St Community span a wide range, from as low as €0.37 to €16.82 per share. Amid these varied perspectives, remember that Iberdrola’s focus on green hydrogen and network expansion continues to be shaped by regulatory decisions that could impact returns and growth.

Explore 10 other fair value estimates on Iberdrola - why the stock might be worth as much as €16.82!

Build Your Own Iberdrola Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Iberdrola research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Iberdrola's overall financial health at a glance.

No Opportunity In Iberdrola?

Every day counts. These free picks are already gaining attention. See them before the crowd does:

• The latest GPUs need a type of rare earth metal called Terbium and there are only 37 companies in the world exploring or producing it. Find the list for free.
• We've found 15 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
• Trump's oil boom is here - pipelines are primed to profit. Discover the 22 US stocks riding the wave.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com