Atlantica Sustainable Infrastructure

AY · NASDAQ

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The case for and against

Updated Nov 27, 2024

Bull case

Atlantica Sustainable Infrastructure PLC has demonstrated a solid pipeline growth, currently totaling 2.2GW of renewable projects and 6GWh of storage projects, reflecting a slight increase from the previous quarter. The company's proactive approach towards new investments is noteworthy, with management having locked in $175-220 million for 2024, indicating a strong commitment to reaching its $300 million investment target for the year. Additionally, the increase of ready-to-build and advanced development projects in the pipeline to 50% suggests a strategic focus on enhancing project delivery, which is expected to contribute positively to future EBITDA growth.

Bear case

Atlantica Sustainable Infrastructure PLC has experienced a decline in Adjusted EBITDA across key segments, with Renewables and Water both declining by approximately 2%, contributing to a modest overall decrease in full-year Adjusted EBITDA of 0.3%. Furthermore, the company's lowered projections for Adjusted EBITDA indicate a negative trend, projecting figures below previous estimates for the years 2023 through 2027. The overall outlook is further constrained by operational challenges within the portfolio, a deteriorating cost of equity, and limited attractive investment opportunities, which together raise concerns about potential dividend reductions.

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