Neoen targets to more than double its capacity in operation by 2022, and this is all the more impressive considering its build-to-own strategy. However, this business model is highly demanding on capex (capex > EBITDA), leading to an out of bounds leverage (net debt/EBITDA of c.8x) permitted by state guarantees and low rates. The bulk of our valuation is thus based on long-term forecasts in the renewables market, a structural uncertainty that the market is unwilling to discount. We initiat
15 Oct 2020
A voracious growth story
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A voracious growth story
Neoen targets to more than double its capacity in operation by 2022, and this is all the more impressive considering its build-to-own strategy. However, this business model is highly demanding on capex (capex > EBITDA), leading to an out of bounds leverage (net debt/EBITDA of c.8x) permitted by state guarantees and low rates. The bulk of our valuation is thus based on long-term forecasts in the renewables market, a structural uncertainty that the market is unwilling to discount. We initiat