Redeia (RED): Under Pressure from the “Great Blackout”By Ion Jauregui – Analyst at ActivTrades
The recent power outage that plunged much of southern Spain into darkness has placed Redeia — formerly Red Eléctrica Española — at the heart of the energy debate. Preliminary findings from the Entso-E report suggest that the Spanish grid operator may have contributed to the network collapse, and investors are already assessing whether this episode could jeopardize the financial stability that has characterized the company in recent quarters.
A critical grid failure?
The technical report by Entso-E has reignited scrutiny over the management of the Iberian power grid. According to its findings, Red Eléctrica de España — a key subsidiary of the Redeia group — made internal connections in the southern part of the country just before the April 25 blackout, which may have triggered a critical power surge and activated the protection systems of several power plants.
The report also highlights a change in the operation of the interconnection with France: from 12:16 to 12:22, a fixed export of 1,000 MW was established, leaving the system with no operational margin or synchronous backup. In just seven seconds, the grid collapsed completely, affecting areas such as Huéneja (Granada), Valdecaballeros (Badajoz), and Don Rodrigo (Seville).
While the company has remained silent, the incident could result in sanctions or regulatory revisions. The Portuguese government has already submitted its own report, while voices within Spain’s energy sector are challenging Entso-E’s data, arguing that the drop was “instantaneous,” leaving no room for corrective measures.
From the Spanish government, Minister for the Ecological Transition Sara Aagesen has ruled out structural failures but admitted that an “over-meshed” grid under extreme conditions can produce undesirable effects, such as voltage overloads.
Strong fundamentals despite the noise
Despite the turmoil, Redeia continues to show solid stock market performance. Trading under the ticker RED, the company closed on Tuesday at €17.81 per share, with a market capitalization near €9.6 billion. Since its yearly high of €19.51, the correction has been modest — just 2% — reflecting investor confidence in its financial soundness.
In Q1 2025, Redeia posted a net profit of €137.8 million, up 4.2% year-on-year. Revenues rose to €404 million, and the company reaffirmed its intention to distribute a €0.80 per share dividend this year, offering an approximate yield of 4.5%.
Technical analysis: support under pressure
Redeia shares hit a peak on April 4, then entered a downward correction that intensified after the “Great Blackout.” The stock bottomed at €17.25 on May 12, followed by a rebound to €18.70 at the end of the month. However, June has seen renewed weakness. Currently, the stock sits near strong support at €17.80, aligning with its volume point of control, though the formation of a triple volume bell indicates a bearish bias.
The RSI stands at 39.25, pointing to slight overselling, while a bearish moving average crossover from June 2 suggests a possible test of recent lows.
Diversification as a shield
Despite operational turbulence, Redeia continues to reinforce its business model. The group leads interconnection projects with France, supported by the European Investment Bank, and maintains strategic positions in telecommunications (Reintel, Hispasat) and international markets through its Redinter subsidiary.
With a P/E ratio of 18.8x and a moderate risk profile, Redeia remains a defensive option for portfolios focused on utilities. Although the blackout has raised questions about aspects of its operational management, the group’s financial strength and diversification continue to uphold investor confidence — for now.
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