JPM-JPMC Utilities Daily 20 November：RED, European Natural Gas Outlook,EDPR, EDP ENGI, NG SSE-20251120

Redeia: Value attractions capped by weak earningsmomentum. Reinstate at Neutral (Research Available)

We reinstate our rating on Redeia at Neutral (was UW prior to our restriction) withan end-27 PT of €17. We see the shares trading at 1.05x 2027E RAB for its TSOoperations in Spain, which we see as attractive given that we estimate that a 1.1xEV/RAB multiple is justified by the regulatory proposal. However, thedisappointing treatment by the regulator of the remuneration to work in progress(WIP) results in earnings growth significantly underperforming RAB growth in2025-27E and we expect this to justify a discount to fair value for the next 12months. Besides, investors are likely to stay on the sidelines while we get the finalofficial report from the CNMC (we expect in Q1 2026) on the reasons that triggeredthe blackout of 28 April, as this should provide some initial indication of thepotential liabilities (if any) that Redeia could be facing (in the long term, as theissue will end up in the courts in our view). (Read full Research here)