PPC: The Most Undervalued Utility Stock in EuropePublic Power Corporation (PPC), Greece’s largest utility company, remains significantly undervalued on the stock market, despite its strong fundamentals and ambitious growth strategy. While European utility stocks are gradually re-rating, PPC continues to trade at a steep discount, indicating a disconnect between its financial outlook and market valuation.
Where PPC’s Valuation Stands Today
In its latest report, Eurobank Equities raised its price target for PPC to €18 (from €17), reiterating a "Buy" recommendation. However, the stock still trades well below that level, highlighting its undervaluation.
Key valuation multiples versus European peers:
Metric PPC 2025 Peer Average EuroStoxx Utilities
P/E 11.9x 14.3x 13.8x
P/E 2026 10.3x 13.1x 13.8x
EV/EBITDA 2025 6.2x 8.0x 7.6x
EV/EBITDA 2026 6.3x 7.7x 7.6x
Across all key years, PPC trades at a 20–30% discount to both its peer group and sector indices, despite offering equal or superior growth prospects.
Strong Growth Prospects: +10% EBITDA CAGR
PPC is forecast to grow its EBITDA at an average annual rate of 10% between 2024 and 2027, based on conservative projections by Eurobank Equities. The company itself has set a more aggressive EBITDA target of €2.7 billion by 2027, compared to the broker’s estimate of €2.4 billion — a discrepancy that reflects the cautious stance of analysts.
Comparison with Major European Players
Company Forecast EBITDA Growth (2024–2027) EV/EBITDA 2025 Notes
PPC +10% 6.2x Strongest growth and among the cheapest
Engie (France) +2.5% 5.7x Low valuation, but weak growth
Orsted (Denmark) +9% 8.1x Decent growth, expensive stock
Iberdrola (Spain) +6% 8.5x Established leader, premium pricing
PPC delivers the highest projected EBITDA growth among its European peers while maintaining one of the lowest valuations, a clear sign that the market is overly discounting execution risks.
Leverage and Investments: A Manageable Strategy
Despite embarking on a €7.5 billion investment plan for 2024–2026, PPC maintains a healthy capital structure. The net debt/EBITDA ratio is projected to remain around 3.5x, which is considered reasonable for a utility with regulated cash flows.
The investment focus includes:
Renewables: Targeting 5 GW of installed capacity by 2026
Grid upgrades and smart meters
Gradual lignite phase-out and plant modernization
These are long-term value-generating investments, boosting efficiency, lowering risk, and enhancing sustainability.
Why Is the Market Ignoring PPC’s Upside?
PPC’s stock has failed to track the rally in both European utilities and non-financial Greek equities. Investors seem wary of the bold targets set by management and are pricing in high execution risk.
Yet this caution appears disconnected from the company’s track record and financials. PPC has:
Delivered consistent earnings growth
Improved margins year over year
A clear and methodical expansion strategy
The market’s hesitation leads to a valuation mismatch that appears unjustified based on fundamentals.
Re-rating Has Yet to Materialize
While European utility stocks have experienced a mild re-rating, PPC has lagged. Should it converge even partially with sector averages, its stock price could see substantial upside. A simple alignment of PPC’s EV/EBITDA multiple with the peer average (8x) would imply a fair value well above €20, even using conservative 2025 EBITDA estimates.
Bottom Line: Undervalued with Strong Fundamentals
PPC is not just cheap — it’s the cheapest major utility stock in Europe, with:
Leading growth forecasts
Prudent debt management
High-return, forward-looking investments
Reasonable targets that remain underappreciated
As market perception catches up with performance, revaluation potential is significant. PPC stands out as one of the most attractive value plays on any European exchange, not just within Greece.
