We value ANE at €19.8 per share on a SOTP approach using a DCF with an average WACC of 6.6%, assuming 30 years' asset life for both Solar and Wind. Our SOTP valuation approach implies an average value of €0.9mn/MW EV, not recognizing any unsecured growth.

We believe there are both wider sector issues and company-specific risks that could prevent the shares from reaching our target price, mainly:
1) a decrease in capex vs the currently expected trajectory could benefit Acciona Energia;
2) a faster-than-expected rates decrease could benefit Acciona Energia, especially given its exposure to floating debt; and
3) a greater visibility on post 2026e pipeline and the consequent pricing-in of the value creation could increase the share price.

Main headwinds would be:
1) higher-for-longer rates; 2) an increase in capex vs the currently expected trajectory; and 3) dilutive farmdowns to dent the company's profitability.