Iren Upgraded to 'Buy' by Kepler Cheuvreux on Attractive Valuation

Analysts at Kepler Cheuvreux have upgraded Italian utility Iren to a “buy” rating from “hold,” citing the company's attractive valuation following a period of share price weakness. The brokerage also raised its 12-month price target on the Milan-listed stock.

Rating and Price Target

In a research note, Kepler Cheuvreux increased its price target for Iren to €3.00 from a previous €2.90. The analysts argued that the utility now trades at "cheap multiples" and offers a generous dividend yield of approximately 6%. The firm also highlighted Iren's effective diversification across regulated and merchant business segments as a key strength.

Second-Quarter Expectations

Looking ahead to Iren's second-quarter results, scheduled for July 30, Kepler Cheuvreux anticipates a "neutral" report that should support the company's full-year guidance. The brokerage forecasts Q2 earnings before interest, taxes, depreciation, and amortization (EBITDA) of around €302 million, which would represent a roughly 2% decline from the prior-year period.

This expected dip is attributed to lower hydroelectric generation and a mild decrease in profitability from energy supply. According to the note, these headwinds were not fully offset by performance in its regulated networks, which had benefited from positive one-off factors in the first half of 2025.

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Full-Year Outlook

Kepler Cheuvreux expects Iren's growth for 2026 to be weighted towards the second half of the year, due to easier year-over-year comparisons and extraordinary maintenance that occurred in the first half of 2026. The analysts believe management will confirm its full-year 2026 guidance, which includes:

• EBITDA growth of 4% year-over-year
• Net profit growth of 3% to €310 million
• Total investments of €950 million
• A stable net debt-to-EBITDA ratio of 3.1x

For its own model, Kepler Cheuvreux projects Iren will post an adjusted EBITDA of €1.41 billion in fiscal 2026, rising to €1.45 billion in 2027.