伊维尔德罗拉：关注美国电网业务的ROE差距

Jorge Alonso Suils+34 915 893 913jorge.alonso@bernsteinsg.com Ken-Ree Choong+44 20 7676 8243ken-ree.choong@bernsteinsg.com RatingMarket-Perform Specialist Sales Gareth Williams+44 20 7762 5256gareth.b.williams@bernsteinsg.com Price Target 19.80 EUR IBE.SM Iberdrola: Mind the (ROE) gap - A deep dive into its US networks One of Iberdrola’s key growth drivers relates to its US networks (EBITDA CAGR 2026-30e+9.3% and RAB CAGR +9.8%) allocating $19bn capex by 2030e. In this report we take a deepdive into the assets and the returns. Adjusted returns appear more stable than reported figures:Achieved ROEs haveconsistently trailed allowed levels, but the key metric is return on the real asset base (capitalemployed), based on US GAAP. Regulatory assets (storm-related), work in progress, andunbilled revenues have expanded capital employed far more than the rate base, implying higherequity needs and diluting reported ROE. On an adjusted basis, ROE improves to ~8.5-9.2%and is more stable, versus reported GAAP ROE falling to 6.6% in 2025. Value creation has narrowed materially:Ultimately, investment attractiveness is driven byvalue creation, measured as the spread between ROE and COE. Our analysis shows that theROE-COE spread has compressed significantly since 2020, declining from 360bps to just70bps in 2025. This reflects the upward trajectory in interest rates over the period, whileallowed returns have lagged and have not fully adjusted to the higher cost of capital. In ourview, in order for the investments to be properly incentivized, regulators should improve theremuneration frameworks. Regulatory visibility/stability is lower than they initially appear:The rate base is notindexed to inflation, allowed ROE is nominal, and regulatory periods lacks standardisation.While the recovery of extraordinary costs (e.g. storm-related) is likely, it remains contingent onregulatory approval and is typically gradual and delayed even in best-case scenarios. In ourview, achieving adequate returns depends more on the ability to negotiate outcomes with theregulator than regulator’s mandate to properly remunerate regulated activities. What can be expected going forward?The rate cases requested by Iberdrola acrossNYSEG, RG&E and CMP should support improved returns. However, given affordabilityconcerns, a material uplift cannot yet be taken for granted. We do see scope for improvement,particularly if regulators aim to incentivise capex amid the recent narrowing in value creation.We assume broadly stable underlying returns, forecasting ~8.0-8.5% for Iberdrola’s USnetworks business in the coming years. Investment Implications We reiterate our Market-Perform rating on Iberdrola with a PT of €19.8/sh. VALUATION COMPS TABLE RELEVANT RESEARCH Company Model | IBE.SM / Iberdrola SA •Regulated Networks Primer series: Part 1: How do regulated return frameworks compare across jurisdictions?•Regulated Networks Primer series: Part 2: A deep-dive into valuation•Iberdrola: Solid strategic positioning reinforced•EDP/Enel/Engie/Iberdrola: Brazilian grids from the European utilities perspective•Iberdrola: Evolution, not revolution; Reassuring but not very exciting DETAILS Iberdrola’s US networks represent ~30% of total RAB and ~13% of EBITDA in 2026e, with an expected EBITDA CAGR of9.3% over 2026-30e. The group is allocating a significant share of capital to this segment, with $19bn (21% of total capex over2026-30e) earmarked for US grid development. Given the differences between IFRS and US GAAP, as well as the complexity ofthe accounting and remuneration frameworks, we have undertaken a deep dive into the segment to better assess the underlyingprofitability. KEY TAKEAWAYS ON IBERDROLA’S US NETWORKS Adjusted ROEs show a more stable trend vs reported ROEs Achieved regulatory ROEs have consistently trailed those allowed by regulators; however, the more relevant metric is the returngenerated on the company’s underlying assets (ROE under US GAAP). Based on reported figures, returns appear weak and showa clear downward trend. That said, adjustments are required, including regulatory assets linked to the gradual recovery of stormcosts, unbilled revenues, work in progress, and tax rate normalisation. Once these are incorporated, the underlying ROE is bothhigher and more stable, in the 8.5-9.2% range, compared with the reported decline to 6.6% in 2025 from 8.3% in 2021. … however, the spread of adj. ROE vs COE has narrowed materially Despite the stable and reasonably attractive underlying ROE, what matters in any infrastructure investments is the value creation(measured by the spread between the ROCE and WACC or between the ROE and COE). Our analysis shows that this value creationhas narrowed materially since 2020 (driven by an upward trajectory in interest rates). According to our estimates, the spreadbetween ROE and the COE has compressed materially by 2025 (to 70bps vs 360bps in 2020) - a development that should serveas a warning sig