Goldman Sachs lifts Iberdrola price target to €25

Goldman Sachs upgraded Spanish utility Iberdrola to buy from neutral on Oct. 1, 2026, and raised its price target to €25 from €21. The new target implies a 21.3% upside compared to the stock's Sept. 30 close of €20.61. The bank pointed to stronger earnings expansion and dividends as key drivers for shareholder returns.

The broker projects Iberdrola's earnings to grow at a compound annual rate of about 10% between 2026 and 2031. It also raised its 2029 to 2031 earnings-per-share forecasts by roughly 20%, forecasting net profit of €10.2 billion in 2030 and €10.9 billion in 2031. Goldman anticipates Iberdrola will present an extended plan at its April 2027 capital markets day, projecting €100 billion in capital spending over 2026 to 2031, up from an earlier €85 billion estimate. Around 70% of that spending would target regulated power networks, primarily in the United States and Britain, alongside wind farm repowering in the United States.

The elevated capital spending and dividend payouts are expected to keep free cash flow negative through 2031, with net debt relative to earnings potentially climbing to about 4 times by the end of the period. Goldman noted that Iberdrola trades at a double-digit premium over peers on enterprise value to earnings and price-to-earnings metrics for 2026 to 2030. The bank listed risks including lower power prices, regulatory updates in Spain and Britain, and reduced allowed returns on regulated assets. Currency swings also present risks, as roughly two-thirds of EBITDA comes from outside Spain and the European Union, with exposure to the US dollar, British pound and Brazilian real. Regulated networks provide about 45% of earnings.

The move follows a separate upgrade on Sept. 29 by Deutsche Bank, which lifted Iberdrola to buy from hold and raised its price target to €22 from €18.50. Deutsche Bank noted higher power prices and expects the utility to increase its annual adjusted net income growth target to 10% from 8%, which could lift adjusted net income to approximately €10 billion by 2030, roughly 10% higher than Bloomberg consensus figures.