HSBC axes EDP Renovaveis share price target to EUR 3.75

Aug 7, 2012 - HSBC has cut the share price target on Portuguese green power firm EDP Renovaveis (ELI:EDPR) to EUR 3.75 from EUR 5.25, in order to reflect the media reports for electricity tariff reductions in Spain.

The new share value corresponds to an upside potential of 53.25%, which justifies the "overweight" recommendation.

EDP Renovaveis has 30% of its wind power assets in Spain where the government seems to postpone the decision on the sector tariffs for September. Thus, the company will remain volatile on the market in the following weeks, analysts with HSBC forecast.

According to them, EDP Renovaveis is trading at a level below the market value of the generated power. The company's stock market capitalisation stands at EUR 6.7 billion (USD 8.3bn), or EUR 900,000 per each MW of wind power capacity.

EDP Renovaveis was rising 1.1% to EUR 2.58 on Euronext Lisbon at 1042 CET on Tuesday.

(EUR 1 = USD 1.239)

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