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Terna (TEZNY)
OTHER OTC:TEZNY
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Terna
(OTC:TEZNY)
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Rating:73Outperform
Price Target:
$33.00
▲(7.67% Upside)
Terna's overall stock score is driven by strong earnings call results and solid financial performance, particularly in profitability. However, high leverage and challenges in free cash flow, along with neutral technical indicators, moderate the score. The fair valuation and attractive dividend yield provide additional support.
Terna (TEZNY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$21.08B
Dividend Yield4.43%
Average Volume (3M)1.44K
Price to Earnings (P/E)17.6
Beta (1Y)0.03
Revenue Growth10.80%
EPS Growth9.07%
CountryUS
Employees6,376
SectorUtilities
Sector Strength65
IndustryRegulated Electric
Share Statistics
EPS (TTM)0.96
Shares Outstanding669,997,300
10 Day Avg. Volume748
30 Day Avg. Volume1,441
Financial Highlights & Ratios
PEG Ratio0.70
Price to Book (P/B)2.02
Price to Sales (P/S)4.18
P/FCF Ratio-13.18
Enterprise Value/Market Cap1.74
Enterprise Value/Revenue18.66
Enterprise Value/Gross Profit21.58
Enterprise Value/Ebitda17.57
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering0
Terna Business Overview & Revenue Model
Company DescriptionTerna - Rete Elettrica Nazionale Società per Azioni, together with its subsidiaries, engages in the electricity transmission and dispatching activities in Italy, Euro-area countries, and internationally. The company operates through Regulated, Non-Regulated, and International segments. It is involved in the planning, development, management, operation, and maintenance of national transmission grid, electricity infrastructures, and high-voltage infrastructures. The company also offers telecommunications systems and equipment, connectivity services, energy solutions, and operation and maintenance services. In addition, it designs, produces, commercializes, and repairs power transformers for electricity transmission and distribution grids, industrial transformers for the steel and metals industries, and special transformers for convertors used in electrochemical production; designs, produces, and supplies marine and terrestrial cables; implements and develops renewable energy projects; and undertakes private interconnector projects, as well as owns the national transmission grid. The company was founded in 1999 and is headquartered in Rome, Italy.
How the Company Makes MoneyTerna generates revenue primarily through transmission tariffs charged to electricity producers and distributors for the use of its transmission network. These tariffs are regulated by the Italian regulatory authority and are designed to ensure a fair return on investments while promoting the reliability and efficiency of electricity transmission. Additionally, Terna earns income from ancillary services, which include balancing services and system flexibility that help maintain grid stability. The company also benefits from significant investments in infrastructure and technology, enabling it to optimize grid operations and integrate renewable energy sources. Partnerships with government entities and other energy stakeholders further enhance its revenue potential, particularly in projects aimed at modernizing the grid and expanding its capacity.
Terna Earnings Call Summary
Earnings Call Date:Jul 29, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 13, 2025
Earnings Call Sentiment Positive
The earnings call presented a robust set of financial results with significant achievements in CapEx growth, strategic partnerships, and successful financial activities like the green bond issuance. Despite the increase in net debt and a slight decline in renewable production, the positive developments and strategic initiatives significantly outweigh the lowlights.Q2-2025 Updates
Positive Updates
Record CapEx Growth
Group CapEx reached EUR 1,390 million, marking an increase of 27% versus the first half of last year and setting a new record in Terna's history.
Revenue and EBITDA Increase
Group revenues and EBITDA both grew by 8%, increasing by approximately EUR 140 million and EUR 103 million compared to the first half of 2024.
Successful Green Bond Issuance
Terna launched its first European Green Bond under the new EUR 4 billion EMTN Programme, with a nominal amount of EUR 750 million and demand outstripping supply by almost 5x.
Strategic Projects and Partnerships
New partnerships, like the one with Microsoft for strategic digital transformation projects, and the completion of major infrastructure projects like the Tyrrhenian Link Eastern Section.
Positive Credit Rating Developments
S&P upgraded Terna's long-term rating to A- and Moody's upgraded Terna’s outlook from stable to positive.
Negative Updates
Increase in Net Debt
Net debt stood at EUR 12 billion, slightly higher compared to the value recorded at 2024 year-end of about EUR 11.2 billion.
Slight Decline in Renewable Energy Production
Renewable sources accounted for about 49% of the national net total production, down from 53% of last year.
Company Guidance
In the first half of 2025, Terna reported robust financial and operational performance, with key metrics reflecting significant growth and strategic advancements. The company achieved an 8% increase in group revenues to EUR 1.894 billion, primarily driven by regulated activities, while EBITDA also rose by 8% to EUR 1.36 billion. Group net income reached EUR 588 million, marking an 8% increase compared to the same period last year. CapEx saw a remarkable 27% increase, reaching EUR 1,390 million, which is a record for Terna, underlining the company's commitment to infrastructure development and grid resilience. Terna's net debt stood at EUR 12 billion by the end of June 2025, reflecting the company's investment in strategic projects such as the Tyrrhenian Link and the Adriatic Link. Despite these investments, S&P upgraded Terna's long-term rating to A-, and Moody's adjusted its outlook to positive. Terna also confirmed its 2025 full-year guidance, underscoring its stable financial position and strategic focus on renewable energy integration and grid enhancement.Terna Financial Statement Overview
Summary
Terna exhibits strong profitability and growth in its income statement, backed by efficient operations. However, the balance sheet is burdened by high leverage, and cash flow analysis highlights challenges in free cash flow due to substantial capital expenditures. Overall, Terna presents a mixed financial picture, with significant strengths in profitability but areas of concern in cash flow and leverage.Income Statement
Terna demonstrates strong profitability with a consistent increase in revenue over the years. The gross profit margin for 2024 is high, reflecting efficient cost management. The net profit margin has also improved, indicating healthy bottom-line growth. EBIT and EBITDA margins are strong, showcasing operational efficiency. Overall, the income statement reflects robust financial health and growth trajectory.85
Very Positive
Balance Sheet
Terna's balance sheet is characterized by a high debt-to-equity ratio, reflecting significant leverage, which could pose risks in adverse market conditions. However, the company maintains a reasonable equity ratio, indicating a stable financial foundation. The return on equity is impressive, demonstrating effective use of equity to generate profits. Overall, while leverage is a concern, the company's equity position remains solid.72
Positive
Cash Flow
The cash flow statement reveals challenges with free cash flow, which is negative, indicating high capital expenditures. However, operating cash flow is strong relative to net income, showing effective cash generation from operations. The free cash flow to net income ratio is unfavorable, suggesting potential issues with liquidity and reinvestment capabilities. Overall, Terna's cash flow health is mixed, with strengths in operational cash generation but weaknesses in free cash flow.68
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.96B | 3.65B | 3.15B | 2.92B | 2.57B | 2.40B |
| Gross Profit | 1.70B | 3.34B | 2.58B | 2.42B | 2.16B | 2.06B |
| EBITDA | 2.08B | 2.57B | 2.11B | 2.04B | 1.83B | 1.73B |
| Net Income | 829.50M | 1.06B | 885.40M | 857.00M | 789.40M | 785.50M |
Balance Sheet | ||||||
| Total Assets | 28.08B | 27.19B | 23.47B | 22.83B | 22.39B | 20.70B |
| Cash, Cash Equivalents and Short-Term Investments | 2.83B | 2.76B | 1.74B | 2.41B | 2.55B | 3.31B |
| Total Debt | 14.75B | 13.86B | 12.98B | 10.81B | 12.42B | 12.59B |
| Total Liabilities | 20.55B | 19.64B | 17.10B | 16.63B | 17.60B | 16.28B |
| Stockholders Equity | 7.51B | 7.52B | 6.32B | 5.15B | 4.68B | 4.37B |
Cash Flow | ||||||
| Free Cash Flow | -1.37B | -1.16B | -963.90M | 831.40M | -511.90M | -245.20M |
| Operating Cash Flow | 695.70M | 1.47B | 1.08B | 2.32B | 832.30M | 941.40M |
| Investing Cash Flow | -1.25B | -2.40B | -2.33B | -1.86B | -863.30M | -1.39B |
| Financing Cash Flow | 293.60M | 1.87B | 464.30M | 92.50M | -1.05B | 2.08B |
Terna Technical Analysis
Positive
30.65
Price Trends
30.38
Positive
30.11
Positive
28.31
Positive
Market Momentum
0.28
Positive
47.24
Neutral
9.99
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TEZNY, the sentiment is Positive. The current price of 30.65 is below the 20-day moving average (MA) of 31.09, above the 50-day MA of 30.38, and above the 200-day MA of 28.31, indicating a neutral trend. The MACD of 0.28 indicates Positive momentum. The RSI at 47.24 is Neutral, neither overbought nor oversold. The STOCH value of 9.99 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TEZNY.
Terna Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $21.31B | 7.25 | 19.13% | 6.09% | 4.43% | 123.35% | |
| ― | $21.08B | 17.56 | 19.03% | 4.43% | 10.80% | 9.07% | |
| ― | $22.06B | 20.93 | 12.34% | 2.85% | 10.96% | -0.77% | |
| ― | $19.09B | 4.29 | 15.47% | 0.30% | 0.44% | 124.47% | |
| ― | $26.93B | 27.37 | 6.96% | 2.95% | 6.62% | 17.35% | |
| ― | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
| ― | $27.60B | 32.00 | 5.63% | 4.00% | 14.44% | ― |
* Utilities Sector Average
TEZNY
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21.92%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.