The investment story of PPC no longer primarily concerns recovery, but its ability to achieve sustainable compound growth in electricity generation, networks, retail, and new related activities, writes a Morgan Stanley analysis with which it initiates coverage of the stock.
Since 2019, the group has fundamentally reshaped its asset base: EBITDA increased from €0.3 billion to €2 billion, installed capacity from Renewable Energy Sources (RES) more than doubled, the Regulated Asset Base (RAB) expanded to €5.7 billion (Morgan Stanley estimate for 2030: €7.3 billion), and the customer base rose to about 8.6 million customers.
The next phase, therefore, concerns the execution of the business plan: the addition of appropriate new installed capacity (MW), the expansion of regulated networks, the leveraging of retail activity, and the creation of a broader regional electricity platform.
With the support of combined capital expenditures (capex) of €22.2 billion for the period 2026-2030 (we assume a lower growth rate of new capacity in new geographic markets), we forecast a compound annual growth rate (CAGR) of adjusted earnings per share (adj. EPS) of 22% annually for the period 2025-2030, the analysts write.
PPC combines leading positions in generation, retail supply, and electricity distribution in Greece and Romania, which gives it a more balanced risk profile compared to a pure generator operating in the wholesale market.
The regulated distribution activity offers earnings predictability, while retail ensures a large customer base through which it can absorb part of the increase in its production capacity. This is important, as the company still structurally shows a power generation deficit, supplying more electricity to retail customers than it produces (estimate for 2025: production 21 TWh and supply 32 TWh).
As new RES, storage, and flexible generation units are added, PPC can reduce its exposure to the wholesale market, improve its risk hedging strategy, and capture greater value across the electricity market value chain.
Romania has already evolved into a significant second market for the group (about 22% of consolidated EBITDA), with PPC holding leading positions in renewables, distribution, and retail, following the acquisition of Enel's assets.
The group has also entered Italy, Bulgaria, and Croatia, maintaining further optionality in the markets of Central and Southeastern Europe (CSEE). The investment rationale is clear: supportive demand growth, retirement of old fossil fuel units, limited interconnections, and structurally higher regional electricity prices.
Nevertheless, Greece remains the group's core market, as it is estimated to absorb 52% of capital expenditures for the period 2026-2030 and will continue to represent about 63% of EBITDA through 2030.
Regarding data centers, the analysis notes that this activity could be a significant additional source of value, provided demand from hyperscalers materializes, with management considering potential capacity of 2 GW in Greece (which is incorporated in our optimistic scenario) and an additional 2 GW in other markets (which are not included in our optimistic scenario).
Despite the stock's re-rating and its strong performance since the beginning of the year, we still see further upside potential to the target price of €27 per share for December 2027, the analysts write.
The main downside risk concerns the execution of the business plan: delays, cost increases, licensing obstacles, lower absorption prices for RES production, production cuts (curtailment), lower returns from new generation units, weaker demand from data centers, or increased regulatory pressures could weaken the investment growth case.
Conversely, we may be overly conservative if PPC executes its business plan faster than our estimates, regional electricity markets remain more “tight” for a longer period, contracts with data centers are implemented earlier, or the returns from RES and storage projects prove higher than forecasts.