It seemed that both Endesa and Iberdrola had reached their highest part of their bull channel. But it is seen that their buying pressure has gone even further and they are leading both listed companies to reach prices that were not anticipated just a few years ago. Being undoubtedly two of the big stars in the selective index of Spanish equities, the Ibex 35. By already trading above the 25 and 11 euros for each share, respectively. And with a revaluation so far this year of 12% and 8% in each of them. Both in a very clear situation of free rise, the best that small and medium investors can have. Because they no longer have resistance ahead and unlimited hikes are opened from now on.
These two values of the Ibex 35 are once again surprising all financial agents for their unstoppable bull run that seems to have no end. At least in the short term and they keep going up and up in the equity markets. In a context in which the selective index of the Spanish stock market has exceeded the psychological level of the 10.000 points. Where the electricity sector is one of those that has been keeping the bullish candle in the last two years and where Endesa and Iberdrola are its two most representative stocks. Practically doubling its valuation on the stock market compared to 2018.
While on the other hand, they are bets on the stock market that have the added value of a very suggestive dividend distribution, with an average and annual profitability very close to 6%. Above the average that is currently 4,85%, one of the highest within the European stock indices. So that in this way, small and medium investors can form a fixed income investment portfolio within the variable. Whatever happens in the equity markets so that in the end you can be calmer while trading on the stock market.
Endesa's target price rises
RBC Capital Markets gives its approval to the turn that Endesa has taken towards renewable energies and as a result of them has decided to raise its board from underweight to 'like the market' and its target price, from 21 euros to 25,50 euros per share. Although its potential for revaluation is zero from its current prices, it is a fact that can help catalyze further increases in electricity from now on. In this sense, it should be noted that the entity's analysts acknowledge that "we are becoming more positive about Spanish suppliers, especially Endesa, which should benefit more from the liberalization of regulation and rates."
On the other hand, Endesa is also another of the bets chosen by Bank of America to be part of its securities portfolio, in this case due to its excellent dividend. Along with other Ibex 35 values, such as are Amadeus and Inditex. At a time when the electricity company is about to surpass the level of 26 euros per share and with a free hand to continue ahead in the coming weeks or even months due to its enormous strength in the financial markets. To the point that some market analysts see potential in the value of up to 30 or 31 euros for each share.
The secret is in renewables
To explain this movement that Endesa has been making, it is necessary to understand the change that is taking place in the electricity sector. Because in effect, this upward change that this listed company has been developing is due to the fact that it is one of the proposals on the stock market that is gaining the most in the "boom in renewables" in Spain. His bull run is not explained with almost no corrections without understanding this process that is revolutionizing the sector in recent months. After being situated, not so long ago, at levels very close to 15 euros. In other words, we are now very close to doubling its price and, more importantly, slowly and without making too much noise, unlike its competitor in the electricity sector.
In any case, and due to his current situation, he cannot put limits on his hikes since it does not make any sense thanks to the fact that he is in the best of possible situations, free ascent. And you can be calm in the value as long as it does not exceed the support it currently has at approximately 22,35 euros. Levels that will be a sign of profit realization and in the most aggressive positions as an entry signal to wait for possible revaluations from that precise moment. In any case, it is a security that is making many small and medium investors rich.
Iberdrola does not stop uploading
It seemed impossible, but in the end the titles of this electric already are above 11 euros. When just a few weeks ago their prices were below 9 euros for each share. In the first two years its revaluation is above 13%, one of the highest in the selective index of national equities. Having surpassed the other Ibex 35 securities in terms of their level of capitalization, even above Inditex or Banco Santander. To the point that it is one of the most followed values by small and medium investors despite the prices at which it is listed at the moment. In what is configured altitude sickness.
While on the other hand, it is also integrated "boom of renewables" in Spain and may be one of its largest sources of income for the coming years. And of course this fact is being transplanted to the configuration of their prices and there is no doubt that they can go higher in their prices. Perhaps it could be around 13,14, 15 or more euros, if everything develops as it has been up to now. Something totally unthinkable in previous periods and that has been one of the great positive surprises that the equity markets have brought us in recent years.
Bet on the electric car
This is another of the facts that explain this upward trend in the electrical value and that can hold much more in its valuation from this precise moment. Because in effect, you cannot forget that this bet on the stock market is one of the options that less risk generate their positions because
In addition, it has just announced that it is advancing in its process of leading the energy transition in Spain with the beginning of the construction of its first photovoltaic plant in Aragon, with 50 MW of installed power, located in the municipality of Azaila, in Teruel. In which, the photovoltaic plant, made up of 142.740 photovoltaic modules of monocrystalline silicon cells with a fixed structure, will generate up to 140 jobs during its construction during the peak period of work. And, once operational, it will produce clean energy for a population equivalent to 24.290 homes per year, in addition to avoiding the emission of some 19.000 tons of CO2 per year. Its commissioning is planned for the end of 2020, where it will already be in operation.
You need to take a breath
This week, both stock values have appreciated by more than 3% and as one of the leading sectors of equities in our country. To the point that there are already some financial analysts who expect major corrections to take place from now on. Like healthy moves so they can take new impulses within a couple of months. Like the fact that they can move in a great laterality in the next sessions on the stock market. Any of these moves can happen these days after this week's bullish binge.
On the other hand, it must be emphasized that the crisis in China, as a result of the appearance of the coronavirus, may favor the behavior of these companies in the electricity sector these days. By acting as safe haven values in the face of this unexpected incidence in the equity markets and where a lot of monetary flow has gone to these two companies that lead the increases this week. But it is a situation that cannot last long due to the verticality of these increases.
Not surprisingly, they are listed that are adding efforts to replace their old portfolio based on nuclear energy and coal towards one more dependent on renewables. And this is what small and medium investors are valuing in their desire to take positions in value as a strategy to make their available capital profitable. With a success in their proposals, at least for the moment, since they are rising values and the most important thing in free rise. Something totally unthinkable in previous periods and that has been one of the great surprises