Iberdrola surpasses Inditex again and becomes the largest company on the Ibex 35 | Economy

Iberdrola headquarters, in Madrid.

Iberdrola has once again surpassed Inditex as the first group by capitalization of the Ibex 35, in the struggle between both companies so far this year for the throne of the Spanish selective. Specifically, the shares of the energy company fell 1.01% at 10.50 this Monday, with downward markets, to place its capitalization above 68,800 million euros, while Inditex yielded 1.84% , to lower its value to just over 68,120 million euros. The group chaired by Ignacio Sánchez Galán, which already in July 2020 managed to establish itself for the first time in its history as the company with the most weight on the Ibex 35, has surpassed Inditex so far in 2022 on several occasions, although without consolidating the advantage.

The third company by capitalization in the Spanish selective is Banco Santander and the fourth, BBVA, although very far in both cases from Iberdrola and Inditex. So far in 2022, despite a bearish context in the markets after the outbreak of the crisis due to the invasion of Ukraine by Russia, Iberdrola has appreciated by around 4%, a rise higher than other companies in the sector. For its part, Inditex fell by around 24% in the year. Since the close of July 26, the day before the presentation of results for the first half, in which Iberdrola announced a net profit of 2,075 million euros in the period —which represents an increase of 36% compared to the same period from the previous year—the energy company’s shares have risen in value by more than 7%.

Morgan Stanley, Citi, UBS, Deutsche Bank, Société Générale, JBCapital Markets, CaixaBank, Mediobanca, Bestinver and GVC Gaesco have published positive reports on the power company once their semi-annual accounts are known, reiterating or improving their recommendations. Altogether, 68% of them are “buy” and the remaining 32% are “hold”. In addition, analysts have valued the company’s strong balance sheet, which has a liquidity cushion of 25,000 million euros, enough to endure without going to the market to finance itself for 27 months. 75% of the group’s debt —some 42,000 million at the end of June in net terms— is at a fixed rate, which represents a great incentive in an environment of rising money prices around the world. Likewise, the group has signed more than 8,500 million euros of financing under favorable conditions, anticipating its financial needs for the year.

Another of its outstanding strengths is its international and business diversification. More than two thirds of its net profit comes from abroad, in which the contributions of its subsidiaries in the United States stand out, where the earnings of its subsidiary in the country, Avangrid, rose 46% in the first half, and in Brazil ( Neoenergia), with an increase of 14%. Also contributing to the global rise in profits were its businesses in the UK (ScottishPower) and Mexico.

Iberdrola maintains its expectation of reaching a record net profit of between 4,000 and 4,200 million euros for the year as a whole, as reiterated in the presentation of results on July 27. Foreign investors controlled 69.25% of the capital at the end of last year. The following by weight were minorities, with 22.22%, and, lastly, Spanish entities, with the remaining 8.53%, according to the company’s 2021 annual report.

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