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Electricite de France SA - Stock Quote EDF

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Morningstar's Electricite de France SA Stock Analysis

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1-Star Price

PREMIUM

5-Star Price

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Economic Moat

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Capital Allocation

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Cutting Our FVE for EDF to EUR 8.80 on Latest Negative News Flow, Uncertainties Remain Very High

Tancrede Fulop, CFA Senior Equity Analyst

Analyst Note

| Tancrede Fulop, CFA |

We cut our fair value estimate to EUR 8.80 from EUR 9.50 after no-moat EDF lowered its 2022 French nuclear production guidance because of corrosion issues and announced yet more cost overruns and delays for the Hinkley Point C project. The share price resilience to the news shows they were anticipated and investors are playing the revival of the Hercules project as French President Emmanuel Macron said during his election campaign that the French state should nationalize EDF's French nuclear business. Still, the hurdles faced by the Hercules project over the last few years show its implementation is uncertain. In addition, the number of nuclear reactors affected by corrosion issues could increase. Therefore, a reduction in 2023 production guidance is possible. All in all, the risk/reward profile of EDF remains unappealing. 

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Electricite de France SA's Company Profile

Business Description

Electricite de France is one of the world's largest energy companies, controlling the French power grid along with a massive global generation fleet. Its French nuclear fleet comprises 58 plants. It operates the largest power supply business in France, which acts as a broker between generators and retail end users, is a major renewable developer, and holds stakes in other energy businesses globally, including a small but growing Chinese footprint. With the acquisition of Areva's nuclear reactor unit in 2017, EDF became an integrated nuclear developer.

Contact
22-30, Avenue de Wagram
Paris, 75382, France
T +33 552081317
Sector Utilities
Industry Utilities - Diversified
Most Recent Earnings
Fiscal Year End Dec 31, 2021
Stock Type
Employees 163,423

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