In late May, PPC completed its capital increase, bringing its total share capital to €4.25 billion (compared to an initial target of €4 billion), while the company raised a total of €4.5 billion in gross proceeds (including €250 million from the sale of existing treasury shares), JP Morgan notes in its analysis of the stock.
In our view, the offering price of €18.63 per share provided a reasonably attractive entry point for new investors. We estimate that this corresponded to a 2028 P/E ratio of around 11x (approximately a 20% discount to the average for European integrated utility companies) and a dividend yield of 6.4%.
As we mentioned earlier, the transaction will help PPC strategically expand its operations and finance the €24 billion capital expenditure (capex) program for the 2026–2030 period, with the aim of achieving industry-leading earnings growth of over 20%, while keeping debt under control (Net Debt/EBITDA below 3.5x).
Although the execution of the plan will be a key factor to monitor in the future, we note that management already has a proven track record of successfully achieving targets. Furthermore, management’s long-term incentive plan (LTIP) aligns, in our view, its interests with those of minority shareholders.
As we incorporate the updated and more ambitious strategic targets into our model, we are upgrading our medium-term earnings forecasts by an average of 10% (we are currently about 5% above the market consensus according to Bloomberg). As a result, we are raising our price target for December 2027 by 19%, to €25 per share, from €21 previously.
We maintain our Overweight recommendation for PPC, as we believe it offers an attractive combination of growth prospects and dividend yields within the European utilities sector, as well as thematic exposure to energy transition trends in Greece and Central and Southeastern Europe.