Today Hera stock trades at multiples way lower than the past. On the other hand, consensus target price is still close to 4 euro.

In light of results that confirm how the Company continues to deliver the profitable growth indicated in the Business Plan despite the risks posed by Covid-19, we are trying to understand the reasons behind market’s behaviour, which at the moment seems to remain indifferent to the huge undervaluation experienced by the share price.

Uncertainty and volatility are the key words that have dominated the equity markets in these times of Covid-19 pandemic. Long term sustainability and “green” agenda are the key words that have shaped the new monetary and fiscal policies in Europe.
Hera’s solid fundamentals, confirmed by half-year results, its authentic commitment to 2030 ESG goals, and the room for potential capital gain considering the mean target price of c.4 euro form the pillars of a robust investment case, which looks appealing, especially in the new scenario.

Hera’s price remains well below its fair value, despite showing the features of a defensive stock, because of the uncertainties concerning the way Italy will exit the deepest phase of the crisis originated by the pandemic.

When the emergency related to the Covid-19 outbreak first hit Italy, Hera’s share price was at its record high of 4.5 euro, reached on 19 February 2020. The sell-off that generally involved all stock markets led Hera to experience a sharp correction, even though more limited compared to that experienced by the FTSE MIB index and the other multi-utilities.

Over the period from 2018 year-end to 19 February 2020, Hera’s share price surged (+67%), overperforming both the industry index – which grew by 61% – and, to an even greater extent, the Italian Blue Chips index, which in the same period increased by 39%.

In 2019, Hera stock price surged by 46.1%, outperforming both the FTSE MIB (+28.1%) and the industry index (+35.0%).

The strong rally of Hera shares took place against a benign backdrop for equity investments, especially favouring the utility sector.

In a context of bullish stock markets, Hera can boast a number of Company-specific drivers.

During 2019, Hera’s stock rose following a continuing upwards path. It over-performed both the FTSE MIB and the FTSE Italy All-share Utility Index, despite both indices had a significantly positive rally since the start of the year.

In this first part of the year, Hera’s share price rose sharply, peaking at 3.55 euro on 18 July 2019. The rally, which took place amid a bullish market outlook, also reveals some Company-specific drivers. Starting from January, stock markets have surged, driven by the Fed’s change of stance: at the beginning of 2019, the […]

On 30 April 2019, Hera held the first Shareholders Meeting after the inclusion of its shares in the FTSE MIB index, on 18 March 2019. The level of participation and the quality of the speeches reveal the ongoing changes inside the Company and the expectations of its shareholders. We talk about that with Jens Hansen, […]

On 18 March 2019, Hera shares have been included into the FTSE MIB, the index made up of the 40 blue chips of Borsa Italiana, the Italian Equity Market. With this entry, Hera achieves a goal that has long guided the efforts of the Company’s Investor Relations. We talk about that to Mr. Jens Hansen, […]

Despite the remarkable recovery achieved from 10 December 2018 onwards, Hera stock continues to trade at a discount compared to the consensus target price of broker coverage, presently at 3.28 euro. Most analyst ratings indicate buying suggestions, with only one neutral rating and no selling recommendation. Broker Rating Target Price (€) Banca Akros Buy 3,30 […]