We value Acciona at €118 per share based on an equity method SOTP approach, taking market value and forecast from each ANE and Nordex. On this basis, we see the ANA shares as fairly valued.

Risks to our investment thesis and achievement of our target price include:
1. Poor sentiment across the renewable supply chain, with cost headwinds continuing to be an issue.
2. Commodity risks – via Acciona Energia, the company has significant exposure to the Spanish merchant price. Any change in long-term Spanish power prices could be negative/positive for valuation.
3. Interest rate risks – the company has long-dated cashflows from some parts of its business. Lower or slower than expected rate rises could present material upside to valuation.
4. The group's construction activity is exposed to the global economic cycle.

If the impact on the company from any of these factors proves to be greater than we anticipate, the stock will likely have difficulty achieving our target price. However, should they be less than anticipated, the stock could trade above our target price.