Despite the rebound that started in the second decade of October, equity markets are still currently bearish, while showing significant losses compared to their levels at the beginning of the year. The general picture remains dominated by deep geopolitical tensions, a particularly severe energy crisis in Europe – where a coordinated reaction among the various EU countries has been lacking – and restrictive monetary policies which, although aimed at slowing inflation, make the profile of economic growth uncertain.

Equity markets suffered heavy losses in the first half of this year, against a backdrop of geopolitical tensions, tightening monetary policies aimed to fight inflation, and deep uncertainty on the evolution of the real economy.
The performance of Hera’s shares could not remain immune to such daunting picture for equity investment, despite the Group’s resilient business model has proven to ensure solid fundamentals over the years, with continuous and sustainable growth over time.

In early 2022, the stock market’s performance has been heavily affected by a combination of negative factors, whose future evolution is difficult to predict.

Geopolitical tensions, inflation, and rising interest rates, all weigh on the economic growth outlook.

In this context, Hera stock outperformed both the FTSE MIB and the Italian utilities index.

Hera’s share continues to benefit from the high quality of its fundamentals and the visible growth perspectives, given the presence in the Group portfolio of businesses that are regulated or enabling the circularity and the energy transition. As a result of these unique features and benefitting from proactive investor-engagement initiatives, Hera has strongly outperformed the sector index.   

Hera’s equity story represents a safe harbour for investors. It represents a 20-year uninterrupted growth story, with strong protection against the risks of today’s scenario, which is characterised by many uncertainties: inflation, unstable energy prices, interest rates expected to rise, geo-political conflicts and ongoing pandemic.

The new Plan to 2025 expresses a clear equity story, based on the growth acceleration of both EBITDA and Earnings per Share. It also leverages the high visibility of the factors that drive an increasingly green path.
Investors will have new elements to evaluate the Hera stock, starting from the 2025 targets, which also envisage a higher remuneration through dividends following higher expected earnings, while the financial profile remains solid.

The utilities sector is certainly not one of the sectors that investors have favoured during 2021; nevertheless, Hera shares have performed well since the beginning of the year, leveraging the generally positive tone of the stock markets and a number of Company-specific factors that have boosted the share price.

Hera’s share price has performed well since the beginning of 2021, also compared to the performance of benchmark indices.

Equity markets have maintained a positive tone even after the start of the normalisation of monetary policy that the Fed announced on 16 June, despite the volatility induced by inflationary fears and, more recently, by the growing infections due to variants of the virus.

In the last few months, Hera has strengthened its equity story in terms of sustainability, also leveraging on prestigious external recognition: after 2020’s inclusion in the Dow Jones Sustainability Index World, the score obtained with the ESG Evaluation by S&P Global Ratings on 21 July 2021 places the Company among the top 15 utilities internationally.

In these early months of 2021, Hera’s share price has gained strength. And not only in absolute terms, with a rise of over 10%, but also because it has outperformed the index of the utility sector. In the last few trading sessions, the stock has even outperformed the FTSE MIB, which is heavily weighted towards stocks that allow the theme of future recovery to play out in a catch-up trade.

The solid results of fiscal year 2020 represent a milestone in Hera’s growth path considering the scenario in which they were achieved. Therefore, they provide an anchor of certainty in a context of stock markets suffering from a severe lack of visibility, especially on the timing of exit from anti-pandemic restrictions.
Investors can read in a very positive way these 2020 results, which surprise while overperforming the preliminary data released in January. Hera confirms its characteristics of a company capable of promptly intercepting economic growth by improving its cash generation.

The new Plan to 2024 clearly indicates both the extent and quality of the value that Hera Group can create: the targets set in the past have been exceeded for the fifth time in a row; the new objectives to 2024 and 2030, are more ambitious than the previous ones and even more closely linked to the new priorities of a Europe that is moving towards “zero emissions” and wants to make the economy even more circular; the prospect of steady growth in dividend per share is confirmed.
Are all elements that will help enhance investors’ perceptions of Hera’s strengths and prospects.