Engie (ENXTPA:ENGI) Valuation Spotlight After First Major Battery Storage Project Win in India

Engie (ENXTPA:ENGI) just secured its first large Battery Energy Storage System project in India. This reinforces its focus on renewable infrastructure and grid reliability. The move highlights Engie’s expanding footprint in one of the world’s fastest-growing clean energy markets.

See our latest analysis for Engie.

The latest Battery Energy Storage System win in India comes as Engie’s momentum builds, with a 7.6% share price return over the past month and a year-to-date gain of 41%. Investors who stuck around have seen a stellar 58% one-year total shareholder return, and nearly a doubling of total returns over three years. These are clear signs that confidence in the company’s renewables strategy is growing, and not just in the short term.

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With such impressive returns and strategic wins, the pressing question for investors is whether Engie’s share price has more room to run or if the market has already factored in its future growth prospects.

Most Popular Narrative: 1.4% Undervalued

Market optimism is pushing Engie's shares close to narrative fair value, with the narrative pegging a slightly higher price than the latest close. The context is steady execution and a renewable-led future, but what is fueling this premium?

Strategic expansion in renewables and energy storage, highlighted by nearly 53 GW of installed renewables/BESS capacity and a 118 GW development pipeline diversified across multiple geographies, positions Engie to capture an outsized share of the multi-decade shift to clean energy, supporting sustainable top-line and earnings growth.

Read the complete narrative.

Curious about the blueprint behind this valuation? One key assumption is the pace of margin evolution in Engie's major business lines. A few bold projections set the tone for the fair value. Find out what next-level forecasts are driving this narrative's price target.

Result: Fair Value of $22.22 (UNDERVALUED)

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

However, execution risks in scaling renewables and potential regulatory changes could quickly challenge the optimistic outlook that is currently priced into Engie’s shares.

Find out about the key risks to this Engie narrative.

Another View: Discounted Cash Flow Shows Limited Upside

While the current fair value points to Engie being undervalued, our DCF model presents a more cautious perspective. According to this method, the shares are trading above the estimated fair value of €16.56, suggesting that the market may already be factoring in much of the anticipated future growth. Which valuation provides a clearer story for investors?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Engie for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 913 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Engie Narrative

If you have a different take or want to analyze Engie's story your way, it's easy to build your own narrative and see what the numbers reveal. Do it your way

A great starting point for your Engie research is our analysis highlighting 3 key rewards and 3 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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