PPC offers differentiated exposure to growth in the European electricity market through south-east Europe, Jefferies says in a report initiating coverage of the stock.
As Greece heads towards the 2027 elections, we believe it is one of the lowest political-risk markets in Europe, compared with other countries holding elections. Large-scale renewables development, favourable regional electricity prices and a strengthened balance sheet support sector growth that is among the strongest in the market.
Execution of the plan is critical, but a PEG ratio below 1.0x is attractive. We initiate coverage with a Buy rating and a price target of €26.50 per share.
Differentiated exposure to growth in the European electricity market
We forecast average annual earnings per share growth of about 17% in 2027-30, more than three times that of integrated peers. The main driver is PPC’s planned addition of about 10GW of renewables capacity by 2030, which would increase its portfolio from 7.1GW to around 17GW (about 13% below the company’s capacity target).
The geographical dimension matters: electricity prices in south-east Europe remain structurally higher than in western Europe, reflecting greater reliance on gas-fired power generation, constraints on interconnections and a shortage of flexible capacity.
We expect these conditions to support the electricity prices the company achieves as PPC adds about 2GW of renewables capacity a year, creating a rare combination of output growth and favourable prices. PPC has the highest total shareholder return (TSR – EPS growth plus dividend yield) among the companies we cover.
Growth translates into value creation
The investment case is not simply about adding capacity. We expect profitability and returns to improve as PPC’s new assets come online.
Although leverage rises during the investment cycle, the recent share capital increase provides significant funding for the growth plan, while the net debt/EBITDA ratio is expected to peak at around 3.5x before declining as capital expenditure (capex) normalises and EBITDA increases. This gives PPC the financial flexibility on its balance sheet to deliver its growth plan without undermining the investment case for the stock.
Favourable conditions in Greece open up new avenues for growth
Greece has moved from the group of higher-risk markets in Europe towards the category of more stable investment destinations, supported by stronger economic performance, improved public finances and lower perceived political risk.
For PPC, this improving environment is creating growing opportunities beyond traditional utility activities. Data centres are a clear example: the company can leverage its land, renewable power generation and grid infrastructure, particularly at former lignite facilities in Western Macedonia, to create a new infrastructure platform.
The proposed initial 300MW AWS project offers the first tangible evidence of this potential, with PPC targeting annualised EBITDA of €170 million by 2030 (about 4% of EBITDA in 2030), solely from leasing non-IT infrastructure.
Coverage initiated with Buy rating and €26.50 price target
PPC trades at about 15x 2027 estimated earnings, broadly in line with integrated European peers despite its significantly stronger earnings growth.
On a growth-adjusted valuation basis, PPC trades at about 0.9x PEG, compared with a median of 3.2x for peers. Importantly, this higher growth is accompanied by an attractive dividend yield of about 4%.