Analyst Note| Tancrede Fulop, CFA |
We maintain our fair value estimate of EUR 15.5 per share along with our no-moat rating after Red Electrica released first-half results in line with expectations. Dividend floor of EUR 1 through 2022 offers a high 6.1% dividend yield. However, the floor will be reduced to EUR 0.8 in 2023-25 implying a 4.9% yield. Also, we project flattish EPS through 2025. This unappealing earnings outlook reflects the end of the remuneration of assets commissioned before 1998 due in 2024. Shares appear slightly overvalued.