Goldman Sachs Ups Iberdrola to Buy on Strong Earnings Growth Prospects
Goldman Sachs upgraded Iberdrola to 'buy' from 'neutral', citing stronger earnings growth and dividend payments as drivers of shareholder returns. The broker raised its price target to €25 from €21, implying a 21.3% upside from Iberdrola's Sept. 30 close of €20.61.
The investment firm expects Iberdrola's earnings to grow at a compound annual rate of about 10% between 2026 and 2031, with continued upward revisions to market profit estimates supporting the shares. Goldman forecasts capital spending of around €100 billion over 2026-31, up from its previous estimate of €85 billion.
The majority of this increase will focus on power grids and repowering wind farms in the U.S., with about 70% of planned spending going toward regulated power networks, mainly in the U.S. and Britain. Goldman expects Iberdrola's investment programme and dividend payments to keep its cash flow negative through 2031.