Elia shares rise on upgraded 2024 guidance

Investing.com — Shares of Belgian utility company Elia (EBR:) rose on Friday after the company upgraded its full-year 2024 guidance to the upper end of its previous forecast range. 

At 4:57 am (0957 GMT), Elia was trading 1.7% higher at €89.20.

Elia in a statement said that its net profit for fiscal year 2024 is now expected to reach the top of the €355-395 million range, representing a roughly 5% increase over market consensus of €375 million. 

This adjustment was driven by stronger-than-anticipated performance in Germany and reduced losses in non-regulated activities. 

Specifically, net profit from Germany is forecasted at the upper limit of €260-290 million, despite adjustments for a lower return on equity base rate.

Total (EPA:) capex remains unchanged at €3.6 billion for Germany and €1.1 billion for Belgium, a redistribution favoring regions with higher returns on equity, such as Germany. 

Operationally, Elia flagged substantial progress in securing and executing its capital investment plans, with approximately 60% of its 2024-2028 capex initiatives already locked in. 

Morgan Stanley (NYSE:) noted that this development reduces risks and strengthens investor confidence in the group’s long-term strategy.

Market analysts view these updates positively, as Elia’s adjusted return on equity is projected to align with the upper end of its 7-8% range, exceeding consensus estimates of 7.5%. 

Morgan Stanley continues to rate Elia stock as “overweight,” reflecting an expectation of above-average total returns relative to its sector over the next 12-18 months.

The company is scheduled to release its full-year results on March 7, 2025, and further updates on its long-term capex strategy are expected at that time.