GEK TERNA: The Investment Gem Yet to Shine TP: 27,4€Despite explosive growth in operating profitability, strategic participation in infrastructure projects, and consistently improving financials, GEK TERNA’s stock remains undervalued—failing to reflect either the group’s current position or, more importantly, its future prospects. With a target price of €27.4 and a current price around €19, the stock offers over 43% upside, according to Axia Research. Yet, the market still hasn't priced in one of the most steadily growing names on the Athens Stock Exchange.
Strong Start to 2025
GEK TERNA posted a robust Q1 2025 performance, beating expectations. Revenue rose 49% to €989.4 million, and adjusted EBITDA surged 55.1% to €135.5 million. Despite increased depreciation and higher financial expenses, net profit came in at €26 million, almost on par with Q1 2024’s €27.1 million.
This strong performance was mainly driven by concessions and construction. The full consolidation of Attiki Odos played a key role, while construction activity benefited from a massive backlog of €6.7 billion. Notably, about 52% of this backlog involves projects where GEK TERNA is also an investor, securing dual revenue streams and increased efficiency.
Attiki Odos and the 9% Yield
One of GEK TERNA’s most strategic moves was acquiring Attiki Odos. This asset is not just capital-intensive but operationally critical, offering stable, predictable cash flows with high yield. According to the company, €60 million in cash distributions are expected in 2025. Given GEK TERNA’s equity investment of €670 million, this implies a 9% cash yield.
Moreover, under the agreement with Latsco to sell a 10% stake in Attiki Odos, the deal value is €80 million—highlighting the asset's attractive return profile, low risk, and strong liquidity.
Construction Margins at 13.5%: A Rare Feat
Construction remains a cornerstone for GEK TERNA, not just in terms of project volume but also margins. The EBITDA margin in Q1 reached 13.5%, up 230 basis points year-over-year. This performance significantly exceeds industry averages, largely due to projects with GEK TERNA’s own equity participation, boosting overall profitability.
Axia describes construction performance as “strong and sustainable,” forecasting continued earnings momentum in the coming quarters.
Energy Segment Withstands Pressure
Despite pricing pressures and stiff competition in the electricity market, GEK TERNA increased operating profitability in energy by 10%. Once the group's core growth driver, this segment now offers stability amid market volatility.
Special focus is being placed on the CCGT unit in Komotini (887MW), expected to be fully operational soon. In parallel, strategic talks with Motor Oil are underway for potential synergies in conventional energy—moves that could further strengthen the group’s operational foundation.
Rich Project Pipeline Ahead
Growth catalysts remain strong. Axia highlights several key developments:
Egnatia Odos Concession: A mega-project expected to become operational by end-2025 or early 2026, generating new concession revenue streams.
Komotini CCGT Station: Its commercial operation will bolster energy operations.
Amfilochia Hydro Project (730MW): Masdar’s potential exercise of a put option to sell its 50% stake could bring capital inflow and added flexibility.
Strategic Energy Partnerships: Expected to unlock added value through synergies and economies of scale.
Target Price: €27.4 – The Disconnect Between Valuation and Reality
Axia Research reaffirmed its €27.4 price target, maintaining a “buy” rating, suggesting a 43.5% upside from June 2’s close at €19.09. The report emphasizes that the current valuation doesn’t reflect GEK TERNA’s cash flow strength, profit margins, or significantly reduced operational risk, now mitigated by diversification and recurring concession revenue.
In a market often driven by hype and speculation, GEK TERNA stands out as a case study of intrinsic value yet to be realized by the board. Backed by analysis, steady cash flow, a diversified business model, and a proven track record in executing large projects, the stock’s upside remains substantial—and largely untapped.
GEK TERNA: 5.08% Stake Changes Hands at €19 (06.04.25)
Three block trades totaling 2.37% of GEK TERNA changed hands on the Athens Exchange, involving 900,000, 1,207,000, and 350,000 shares respectively—all at €19/share, despite the stock trading above €19.30.
The combined transaction value reached €46.87 million. Later in the session, five additional blocks traded at the same price, totaling 2.7 million shares worth €52.3 million.
Sources indicate that the placement involved institutional investors, with no shares sold by key shareholder Giorgos Peristeris.
Following GEK TERNA’s strong Q1 results, investor interest is intensifying, with many portfolios seeking exposure. As per the company’s announcement, revenue rose 49% to €989.4 million and EBITDA increased 55.1% to €135.5 million in the first quarter of 2025, with all business segments showing growth.
