Firms put the brakes on Endesa's rally on the Ibex

The energy company's earnings yesterday showed a flat IBEX, consolidating a 31% rally so far this year. Analyst firms reacted with mixed reviews. Barclays gave the most positive rating, while Goldman Sachs posted the biggest setback.

Endesa's stock price is enjoying one of its best starts to a year in recent memory. Despite the defensive nature of its sector, the energy company's shares have soared 31% in just over four months, more than double their gains in 2024 .

The blackout on April 28th didn't stop this stock market rally. That same day, Endesa's value rose 1%, and in the following six sessions, it posted five gains and only one decline.

The results released yesterday left its share price virtually unchanged. Endesa closed 0.07% higher at €26.64. In the midst of the electricity crisis, the company managed to double its profits to €583 million after the "tax increase" on the sector was eliminated.

The market's lukewarm response to yesterday's results extends to analyst firms. Jefferies admits that net profit slightly exceeded forecasts, while EBITDA was in line with expectations .

Beyond the first-quarter results, Jefferies draws attention to the additional period of uncertainty that the April 28 blackout could cause . In its report, the US company notes that "we believe the key catalyst for Endesa will be gaining clarity on the regulatory update , which we believe could be further delayed for several months due to the contingency surrounding last week's blackout."

Since yesterday's earnings release and until today's trading session, five analyst firms have modified their target price for Endesa, according to data compiled by LSEG. The new valuations are mixed.

The most influential factor in the share price of Endesa, one of Europe's most promising utilities in 2025, is the downgrade issued by Goldman Sachs . One of the most influential firms in the markets has lowered its recommendation from "neutral" to " sell ." Endesa's inclusion on Goldman's list of stocks to sell is weighing on investor sentiment.

In its report, Goldman Sachs highlights the solid results of its business, but estimates that the energy company may be approaching the end of its earnings improvement cycle . "We see the earnings improvement cycle coming to an end soon following what we currently consider 'embedded margin peaks' in the electricity sector, and in light of what we consider already elevated expectations regarding the upcoming regulatory review of the energy distribution sector."

Morgan Stanley also opens the door to divesting from Endesa. The US bank has raised its target price on the stock from €24 to €25 per share . However, its new valuation represents a downside potential of 6% compared to yesterday's close.

UBS also sees downside risks for Endesa. The Swiss firm has slightly raised its previous target price, set at €25.2. Its new valuation stands at €25.6 , one euro per share below the €26.64 price it opened today.

Bernstein analysts are more confident about Endesa's ability to sustain its stock market rally. The US firm has raised its target price to €27.50 per share , 3% above its starting price in today's session.

Barclays is the most optimistic among the firms that have revised their valuations following yesterday's results. The British bank has raised its target price for Endesa, from €26.4 to €28.6 per share . This level represents a potential upside of 7% compared to yesterday's close.

Pending further updates to the analysts' outlook, the market consensus , €24.71 per share, remains below Endesa's current share price, which has still risen by nearly 30% this year alone.