IBERDROLA

Analysis of Iberdrola share price

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The energy sector is very popular in Europe, where there are several large energy producers and distributors, Iberdrola is one of the best known in the stock market. However, before trading with these stocks, it is necessary to make an analysis. For this reason, we have decided to explain in more detail the activities of this company and provide you with some historical data on its shares that will help you better understand how this company operates.

Elements that can influence the price of this asset:

Analysis N°1

The energy market as a whole will be followed with the utmost attention, and in particular the development of competition in the market of alternative distributors, which is having an increasing impact on the Iberdrola group's market share.

Analysis N°2

Another element to be followed with the greatest interest concerns the development of the activities of the Iberdrola group in the green energy segment. These energies are expected to replace current thermal energies in the coming decades.

Analysis N°3

It goes without saying that the internationalization strategy of Iberdola's activities is a key element and you should pay particular attention to certain strategic operations aimed at accentuating or accelerating it, such as the establishment of strategic partnerships with foreign companies.

Analysis N°4

In general, the prices charged by other companies in the market, as well as the tariffs regulated by the governments of certain countries, may have an influence on Iberdrola's activities, making it more or less competitive with its direct and indirect competitors.

Analysis N°5

We will also take note of any disposal or acquisition operations that the group may carry out in the coming years with the aim of focusing its activities on the most profitable segments and eliminating the least profitable activities.

Analysis N°6

Finally, you should of course also take into account the group's financial results, which you can consult on its official website and which should ideally be compared with the objectives set out in Iberdola's strategic plans or with the expectations of analysts and specialists in this market. The use of ratios will be a real plus for this analysis and will allow you to better evaluate the real value of the company and its share on the stock market.

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General presentation of Iberdrola

The Iberdrola Group, which currently employs 27,169 people worldwide, is currently one of the leaders in energy production and distribution in Spain. In fact, it is the second largest electricity generation group in Spain and the first in the country in terms of market capitalisation, as well as being one of the world leaders in the production of wind energy. Its business is divided between different sectors, mainly the production and distribution of electricity and gas, but also the engineering and construction of power plants and real estate activities. Its assets in Spain include five nuclear power plants, four hydroelectric power plants and nine thermal power plants.

In Spain, as well as in the Spanish-speaking world and other countries, Iberdrola is best known for its two main activities: the supply of energy, such as gas and electricity, to individuals, and its large-scale energy activities, which include wind power, among others.

In order to understand the extent of the company's presence on the international scene, it is important to know that Iberdrola has companies around the world through which it carries out its activities. In Spain, its three subsidiaries are divided between the production, distribution and renewable energy sectors. In the United Kingdom, it operates with ScottishPower, the country's fourth-largest energy provider, while in the United States it has been operating with its subsidiary Avangrid Inc since 2015. In fact, in this country, it carries out 10% of its business.

Mexico is also a very relevant country for Iberdrola, along with other Spanish companies such as Siemens Gamesa or Telefónica, since it owns five wind farms there and manages its activities through two companies.

Iberdrola's share price is currently quoted on the Spanish Mercado Continuo market and is included in the calculation of the Ibex 35 stock market index.

Analysis of Iberdrola share price
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The major competitors of Iberdrola

Let's move on to a quick presentation of Iberdrola's main competitors:

Engie 

The French energy industrial group Engie is currently the third largest non-oil energy company in the world and has the French state as its main shareholder.

EDF 

The same applies to the French group EDF which specialises in the production and supply of electricity and is more than 80% owned by the state. It is the leader in this sector in France and in Europe as well as one of the leaders in electricity production in the rest of the world.

Enel 

The Enel group is also a former Italian national electricity company and the main producer in Italy. It is also a multi-service group including electricity, natural gas and water as well as a leader in electricity production in the world.

E.ON 

This other European company specializes in energy and was formed from the merger of Veba and Viag in 2000. It is based in Essen and is listed on the Frankfurt Stock Exchange and the DAX index.

RWE AG 

Finally, the German conglomerate RWE also specializes in the energy sector and is a distributor of electricity, gas and water to consumers in Europe and North America.


The major partners of Iberdrola

Finally, we would like to present two examples of strategic partnerships that the Iberdrola Group has established in the past:

Areva

In 2011, Iberdrola signed a strategic partnership agreement with Areva's subsidiary Areva Wind to develop joint offshore wind projects in France as part of the French government's programme to install 6GW of power before 2020.

Volkswagen 

More recently, in 2020, Iberdrola strengthened its partnership with the manufacturers Volkswagen and Seat to accelerate electrification in Spain. This agreement aims to encourage the use of 100% renewable energy throughout the vehicle cycle and Iberdrola becomes a strategic partner of reference for the supply of this energy in the vehicle value chain. The companies will collaborate in the development of a network of public charging infrastructures and thus contribute to the achievement of the emission reduction targets set by the Green Deal.

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The factors in favour of a rise in the Iberdrola share price:

To better understand the future challenges of the Iberdrola group, it is important to know the advantages and disadvantages of this value, in other words, its strengths and weaknesses, which are as follows

The advantages of the Iberdrola group include the following:

  • First of all, the fact that Iberdrola operates in different regions is of course one of its major assets, as this guarantees strong accessibility to its products and services. The group also has a strong online presence on various websites and social networks and effectively manages media to develop its proximity to end customers.
  • The good financial situation of the Iberdrola group is also an advantage and allows it to invest significantly.
  • The group also benefits from access to various raw material suppliers, which helps it to gain efficiency by reaching a wider target than with its own network.
  • Iberdrola also has sufficient and practical means to gain growth with a well-developed IT infrastructure and competent human capital, particularly in the area of services, which is at the heart of the group's strategy.
  • The group's horizontal and vertical integration also allows it to improve its control over the entire value chain and offer better access to raw materials and rapid delivery to end customers.
  • Finally, Iberdrola holds several intellectual property rights that can make its products and services unique and exclusive, limiting the impact of competition.
The factors in favour of a drop in the Iberdrola share price:

Of course, Iberdrola also has a few shortcomings and drawbacks that you should also be aware of, the main ones being

  • First, the group is often targeted by environmentalists for poor waste management practices and its failure to integrate sustainability into its business operations.
  • There is also a lack of budget for marketing and promotional activities, which tends to weaken the ability of businesses to expand their customer base and encourage retention.
  • Reduced budgets in research and development activities can also have a negative impact on the company's performance due to poor market knowledge.
  • Finally, the group's customer service is considered poor by customers, particularly in terms of complaint handling, and can lead to a loss of leads due to a negative brand image and thus affect its growth.
The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.

Frequently Asked Questions

What is the origin of Iberdrola and when was it created?

The company Iberdrola has its origins in 1992. It is the result of the merger of two major historical operators in the electricity sector in Spain, namely Iberduero and Hidroeléctrica Espanola. Gradually, the group's growth accelerated and the company underwent a phase of expansion in 2001, which has continued and has been driven by numerous acquisitions, including in Scotland, the United States, Brazil and Bolivia.

Is the Iberdola Group share listed on a major stock market index?

Of course, as you probably already know, the Iberdola Group is currently one of the most important companies on the Spanish market. It is, of course, a company listed on the main Madrid stock exchange. But it is also included in the Spanish national benchmark stock market index, the Ibex 35, as it is one of the 35 largest capitalisations in the country.

Is technical analysis of Iberdrola stock required?

While fundamental analysis of the Iberdola share is of course an essential analysis to try to understand how this stock is likely to evolve over time, the same goes for its technical analysis. Indeed, it is by comparing these two types of analysis that you will have the best chance of obtaining coherent and solid buy or sell signals.

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