Endesa Kept at Buy as BofA Notes 'Positive' Drivers in Q2; Price Objective, Forecasts Up

04:57 AM EDT, 07/10/2026 (MT Newswires) -- BofA Global Research reiterated its buy rating on Endesa (ELE.MC) ahead of its interim report on July 29, expecting positive drivers in the second quarter to offset negative developments during the period. "We see several positive developments in Q2: 1) Endesa received a positive court ruling in May, with an indicated cEUR0.1bn one-off at EBITDA and a further benefit from backdated interest (we est. cEUR30m); 2) Spain announced end-June that the 7% generation tax (already suspended for 2Q, we est. cEUR40m +veimpact) will be phased down from 3Q (est. cEUR30m +ve) before being removed altogether from FY28; 3) Strong off-peak spot prices (EUR88/MWh ave. in 2Q vs. EUR53/MWh in 1Q); 4) continued to strong hydro conditions; 5) upside optionality from US LNG contract," analysts said Thursday, adding that these factors should "outweigh" elevated ancillary expenses, retail customer losses and high short position. BofA forecasts net income of 590 million euros and EBITDA of 1.47 billion euros for the second quarter, corresponding to year-over-year growth of 5.5% and 14.5%, respectively. Analysts also expect the group's first-half results to trigger further EPS upgrades and share outperformance, raising their EPS projections for 2026 to 2028. "We also liſt our FY28-30E+ forecast by 1.7-1.8%, as we do not see the cut in generation tax reflected in the forward power curve, leaving us 5-6% ahead of consensus for FY27E+. Our [price objective] rises 2.2% to EUR41.1, driven by the changes to our estimates," BofA added.