Equity research: an evaluation of EDP´s tender offer over EDP Renováveis
Autor(a) principal: | |
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Data de Publicação: | 2017 |
Tipo de documento: | Dissertação |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10071/16281 |
Resumo: | The increasing cost competitiveness of renewable technologies (mainly wind power and solar PV), the continuous increase in global electricity demand and strict government policies towards the decarbonisation of the economy are some of the main challenges and growth opportunities that have been increasingly transforming the renewable energy industry. One of the companies in the front row of this ongoing revolution is EDP Renováveis, focused exclusively on the generation of energy from renewable sources, primarily wind onshore. Hence, to benefit even more from the attractive growth of EDPR, its major shareholder (EDP - Energias de Portugal) launched on 27 March 2017 a tender offer to buy-back the 22.47% of share capital it did not hold in the subsidiary, at a price of €6.75 per share. This dissertation presents, as of 31 March 2017, a comprehensive analysis and consequent estimation of the fair value of EDP Renováveis, by targeting a price for the year-end 2017. Consequently, it allowed for the fair evaluation of EDP’s offer and to answer whether minority shareholders should be willing to accept it or not. Accordingly, a sum-of-the-parts DCF valuation derives a target price of €7.83 per share, i.e., a 13% upside, which clearly indicates that the price offered by EDP did not truthfully reflected the fundamental value of the company and its potential growth. Overall, the positive historical performance and low-risk approach to attractive markets, such as the United States, are fundamental to support a buy recommendation, considering the market ight be undervaluing the stock |
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Equity research: an evaluation of EDP´s tender offer over EDP RenováveisValue of firmEquity researchValuationRenewable energyEDP-Energias de PortugalEnergia renovávelAvaliação de empresasGestão do riscoTrabalho de projetoThe increasing cost competitiveness of renewable technologies (mainly wind power and solar PV), the continuous increase in global electricity demand and strict government policies towards the decarbonisation of the economy are some of the main challenges and growth opportunities that have been increasingly transforming the renewable energy industry. One of the companies in the front row of this ongoing revolution is EDP Renováveis, focused exclusively on the generation of energy from renewable sources, primarily wind onshore. Hence, to benefit even more from the attractive growth of EDPR, its major shareholder (EDP - Energias de Portugal) launched on 27 March 2017 a tender offer to buy-back the 22.47% of share capital it did not hold in the subsidiary, at a price of €6.75 per share. This dissertation presents, as of 31 March 2017, a comprehensive analysis and consequent estimation of the fair value of EDP Renováveis, by targeting a price for the year-end 2017. Consequently, it allowed for the fair evaluation of EDP’s offer and to answer whether minority shareholders should be willing to accept it or not. Accordingly, a sum-of-the-parts DCF valuation derives a target price of €7.83 per share, i.e., a 13% upside, which clearly indicates that the price offered by EDP did not truthfully reflected the fundamental value of the company and its potential growth. Overall, the positive historical performance and low-risk approach to attractive markets, such as the United States, are fundamental to support a buy recommendation, considering the market ight be undervaluing the stockA crescente competitividade no custo das tecnologias (principalmente eólica e solar), o aumento no consumo de eletricidade e as rígidas políticas governativas rumo à descarbonização da economia são alguns dos principais desafios que têm, cada vez mais, transformado o sector das energias renováveis. Uma das empresas que se encontra em posição favorável nesta revolução em curso é a EDP Renováveis, dedicando-se à produção de energia exclusivamente através de fontes renováveis, particularmente eólica onshore. Assim, para incrementar a exposição ao crescimento das renováveis, o maior acionista (EDP - Energias de Portugal) lançou, a 27 de março de 2017, uma Oferta Pública de Aquisição (OPA) sobre os 22.47% de capital que não controlava na subsidiária, a um preço de 6.75€ por ação. Esta dissertação apresenta uma análise, a 31 de março de 2017, e consequente definição de um preço-alvo para a ação no final do ano de 2017. Foi também possível analisar se o valor oferecido pela EDP era justo e se os acionistas minoritários estariam, ou não, dispostos a aceitá- lo. Um modelo DCF, alicerçado na soma das partes, assinala um preço-alvo de €7.83, ou seja, uma apreciação de 13%, o que indica que o valor oferecido pela EDP não reconhece verdadeiramente o valor intrínseco e o crescimento potencial da empresa. Concluindo, o desempenho histórico positivo aliado a uma abordagem de baixo risco na exposição a mercado atraentes, como os Estados Unidos, são essenciais para reforçar uma recomendação de Compra, considerando que o mercado não reflete o correto valor da EDP Renováveis.2018-07-09T12:21:20Z2020-07-09T00:00:00Z2017-11-07T00:00:00Z2017-11-072017-09info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/masterThesisapplication/pdfapplication/octet-streamhttp://hdl.handle.net/10071/16281TID:201760932engHeitor, Gonçalo Manuel Martinhoinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-11-09T17:43:59Zoai:repositorio.iscte-iul.pt:10071/16281Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T22:20:49.291251Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Equity research: an evaluation of EDP´s tender offer over EDP Renováveis |
title |
Equity research: an evaluation of EDP´s tender offer over EDP Renováveis |
spellingShingle |
Equity research: an evaluation of EDP´s tender offer over EDP Renováveis Heitor, Gonçalo Manuel Martinho Value of firm Equity research Valuation Renewable energy EDP-Energias de Portugal Energia renovável Avaliação de empresas Gestão do risco Trabalho de projeto |
title_short |
Equity research: an evaluation of EDP´s tender offer over EDP Renováveis |
title_full |
Equity research: an evaluation of EDP´s tender offer over EDP Renováveis |
title_fullStr |
Equity research: an evaluation of EDP´s tender offer over EDP Renováveis |
title_full_unstemmed |
Equity research: an evaluation of EDP´s tender offer over EDP Renováveis |
title_sort |
Equity research: an evaluation of EDP´s tender offer over EDP Renováveis |
author |
Heitor, Gonçalo Manuel Martinho |
author_facet |
Heitor, Gonçalo Manuel Martinho |
author_role |
author |
dc.contributor.author.fl_str_mv |
Heitor, Gonçalo Manuel Martinho |
dc.subject.por.fl_str_mv |
Value of firm Equity research Valuation Renewable energy EDP-Energias de Portugal Energia renovável Avaliação de empresas Gestão do risco Trabalho de projeto |
topic |
Value of firm Equity research Valuation Renewable energy EDP-Energias de Portugal Energia renovável Avaliação de empresas Gestão do risco Trabalho de projeto |
description |
The increasing cost competitiveness of renewable technologies (mainly wind power and solar PV), the continuous increase in global electricity demand and strict government policies towards the decarbonisation of the economy are some of the main challenges and growth opportunities that have been increasingly transforming the renewable energy industry. One of the companies in the front row of this ongoing revolution is EDP Renováveis, focused exclusively on the generation of energy from renewable sources, primarily wind onshore. Hence, to benefit even more from the attractive growth of EDPR, its major shareholder (EDP - Energias de Portugal) launched on 27 March 2017 a tender offer to buy-back the 22.47% of share capital it did not hold in the subsidiary, at a price of €6.75 per share. This dissertation presents, as of 31 March 2017, a comprehensive analysis and consequent estimation of the fair value of EDP Renováveis, by targeting a price for the year-end 2017. Consequently, it allowed for the fair evaluation of EDP’s offer and to answer whether minority shareholders should be willing to accept it or not. Accordingly, a sum-of-the-parts DCF valuation derives a target price of €7.83 per share, i.e., a 13% upside, which clearly indicates that the price offered by EDP did not truthfully reflected the fundamental value of the company and its potential growth. Overall, the positive historical performance and low-risk approach to attractive markets, such as the United States, are fundamental to support a buy recommendation, considering the market ight be undervaluing the stock |
publishDate |
2017 |
dc.date.none.fl_str_mv |
2017-11-07T00:00:00Z 2017-11-07 2017-09 2018-07-09T12:21:20Z 2020-07-09T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
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info:eu-repo/semantics/masterThesis |
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masterThesis |
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publishedVersion |
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http://hdl.handle.net/10071/16281 TID:201760932 |
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