Intrinsic Value Électricite de Strasbourg S.A. (ELEC.PA)

• Previous Close: €218.00
• Intrinsic Value: €75.56
• Upside potential: -65%

Stock Valuation Context

Business Model And Market Position

Électricite de Strasbourg SA operates as a key regional energy provider in France, specializing in electricity and natural gas distribution for residential, commercial, and municipal clients. The company’s diversified operations include electrical engineering, public lighting, heating networks, and energy efficiency services, positioning it as an integrated utility player. As a subsidiary of EDF Développement Environnement SA, it benefits from synergies with its parent company while maintaining a localized focus on the Alsace region. Its involvement in renewable utilities aligns with France’s broader energy transition goals, reinforcing its relevance in a decarbonizing market. The firm’s technical expertise in energy optimization and infrastructure development provides a competitive edge in serving both urban and industrial customers. With a century-long legacy, Électricite de Strasbourg combines stability with adaptability, leveraging its regional dominance to navigate regulatory shifts and evolving energy demands.

Revenue Profitability And Efficiency

Électricite de Strasbourg reported revenue of €1.42 billion, with net income of €150.4 million, reflecting a robust margin in the regulated utility sector. Diluted EPS of €20.98 underscores efficient earnings distribution. Operating cash flow of €203.4 million, against capital expenditures of €87.1 million, indicates strong cash generation to fund growth while maintaining financial flexibility.

Earnings Power And Capital Efficiency

The company’s net income of €150.4 million demonstrates stable earnings power, supported by its regulated and diversified revenue streams. Low total debt of €7.9 million relative to cash reserves of €156.6 million highlights disciplined capital management, with minimal leverage constraints on future investments or shareholder returns.

Balance Sheet And Financial Health

Électricite de Strasbourg maintains a conservative balance sheet, with €156.6 million in cash and equivalents against negligible debt of €7.9 million. This liquidity position, coupled with positive operating cash flow, ensures resilience against market volatility and supports ongoing infrastructure investments without reliance on external financing.

Growth Trends And Dividend Policy

The company’s growth is tied to regional energy demand and France’s renewable transition, with steady cash flows supporting a dividend of €8.6 per share. Its modest capex suggests a focus on incremental upgrades rather than aggressive expansion, aligning with its stable, utility-based business model.

Valuation And Market Expectations

With a market cap of €1.08 billion and a beta of 0.32, the stock is priced as a low-volatility utility, reflecting investor expectations of predictable returns. The dividend yield and earnings stability likely appeal to income-focused investors, though growth prospects are tempered by the regulated nature of its operations.

Strategic Advantages And Outlook

Électricite de Strasbourg’s strategic advantages include its regional monopoly, technical expertise, and alignment with France’s energy transition. The outlook remains stable, with regulated returns providing a floor to earnings, while opportunities in energy efficiency and renewable projects offer incremental growth potential.

Sources

Company filings, Euronext Paris disclosures