Enel (BIT:ENEL): Is the Current Valuation Overlooking Subtle Shifts in Performance?

Enel (BIT:ENEL) has caught investor attention recently, and not because of any seismic headlines or major earnings surprises. The stock's latest moves seem subtle on the surface, but they raise some interesting questions for anyone tracking the company. Sometimes, it's the quietest shifts that are worth a closer look, particularly when there's no obvious news driving the action. Looking back, Enel's stock has managed steady gains this year, returning 11% year-to-date and nearly 18% over the past twelve months. While there have been minor fluctuations in recent weeks, momentum appears to have cooled a bit after a very strong multi-year run that saw the share price more than triple in the past three years. In the background, the company’s annual revenue and net income have both grown at a low single-digit pace, offering a sense of stability even as broader markets remain choppy. So the real question is, with this year’s moderate pace and no clear catalyst, is Enel trading at a bargain, or are investors already factoring in all the upside potential?

Most Popular Narrative: 8% Undervalued

The most widely followed narrative currently sees Enel as undervalued by 8%, with analysts implying there is room for further upside if certain positive trends materialize.

Enel's significant investment in digitalization (for example, smart grids, automation, BESS capacity now at 11.5GW) and grid modernization is yielding improved operational efficiency. This is evidenced by €1 billion in cash cost savings already realized toward its 2027 target, supporting margin expansion and sustained net income improvement.

Is this undervaluation hiding in plain sight? The story hinges on bold financial bets, evolving profit margins, and a future valuation multiple that could surprise even Enel's long-time followers. What hidden drivers turn steady cash flow and digital transformation into a price resurgence? The assumptions fueling this call may catch you off guard.

Result: Fair Value of €8.49 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent currency volatility and flat electricity demand in Enel's core markets could limit earnings growth and challenge the bullish valuation case.

Find out about the key risks to this Enel narrative.

Another View: What Do Market Comparisons Say?

Looking at Enel through the lens of its earnings multiple compared to the European utilities industry leads to a more cautious assessment. This approach suggests the stock may actually be getting ahead of itself. Are market expectations too optimistic? Or is there more upside to come?

Story Continues

See what the numbers say about this price — find out in our valuation breakdown.BIT:ENEL PE Ratio as at Sep 2025

Stay updated when valuation signals shift by adding Enel to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Enel Narrative

If you think the story looks different from your perspective or enjoy digging through the details firsthand, crafting your own insights takes just a couple of minutes. Do it your way.

A great starting point for your Enel research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ENEL.bit.

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