EDP Upgrades Again, but the Next Act Needs a New CEO

The upgrade habit

EDP has turned guidance raises into a quarterly ritual. In February, management said it felt “very confident with the 2026 guidance” — Miguel de Andrade, Chief Executive Officer (CEO) · 2026-02-26. By July, it was “upgrading for the second time this year our guidance” — Miguel Stilwell d'Andrade, Chief Executive Officer · 2026-07-30. On Friday it lifted again, to roughly EUR 5.4 billion of recurring EBITDA and EUR 1.4 billion to EUR 1.5 billion of recurring net profit — a 16% increase versus the original Capital Markets Day assumptions. The nine-month base was strong: recurring EBITDA of EUR 4.2 billion, up 11%, and recurring net profit of EUR 1.19 billion, up 22%. The CEO called it “a really strong performance in the first 9 months of 2026” — Miguel de Andrade, CEO · 2026-11-06.

The obvious question is whether this is genuine operating momentum or a company that keeps clearing a low bar. Management pre-empted it: the upgrade is not driven by one factor, and the company is not assuming additional asset-rotation gains beyond the roughly EUR 0.3 billion already expected. That matters because the market has heard the guidance upgrade story before. This time the breadth is better — networks, FlexGen and renewables all contributed — but hydro and asset rotations still do a lot of the work. The business plan remains the reference point, and there is still no new Capital Markets Day date.

The unclogged motor

The most credible part of the story is Electricity Networks, now about 31% of group EBITDA and roughly 40% of net income. Portugal accounts for about half of that, Brazil 34% and Spain 16%. The regulatory resets are going EDP's way: a 20-basis-point increase in the Portuguese return on RAB proposal, an all-in pre-tax return of about 8% in Portugal, roughly 9% in Spain and around 17% in Brazil. EDP has EUR 4.1 billion of Iberian distribution investment planned through 2030, 60% above the prior five-year period. The CEO's phrase is the one to keep: “this is basically a motor which for many years was clogged up at EDP. And I think now finally, we have the conditions to begin to move forward” — Miguel de Andrade, CEO · 2026-11-06. Regulated, capex-backed and visible is a better equity story than rain.

The spread trade in Iberia

FlexGen is where the weather and the market design meet. Higher solar penetration has widened the gap between solar and non-solar hours from about EUR 18 per megawatt-hour in 2024 to EUR 42 in the first nine months of 2026, with forwards implying roughly EUR 81 in 2027. That is the solar-hour spread that makes pumped hydro valuable: pumping volumes rose from 1.8 terawatt-hours in 2024 to 2.1 terawatt-hours in the nine-month period, with about 3 terawatt-hours a year expected going forward. The offset is that higher ancillary services costs created a roughly EUR 200 million drag in the supply business. Management expects that to reprice toward zero over 2027-28, leaving the generation benefit intact.

Hedging reduces the near-term risk. For 2027, 85% of production is hedged at a baseload price of around EUR 64 per megawatt-hour; for 2028, 30% to 40% is locked at around EUR 60. The new risk word is dry winter — October was dry, and guidance assumes a dry November. That is a shift from prior calls, when the anxiety was expressed through reservoir levels and hydro shortfalls. Same risk, different vocabulary.

Data centers: optionality, not yet a contract

The data center theme refuses to go away. It was EDP's top keyword in the second quarter of 2026 and has stayed near the top since. The pitch is unusually broad: every additional gigawatt of data-center demand could require about four gigawatts of new renewables plus storage; EDP has 5.5 gigawatts of Iberian wind, solar and battery pipeline, 8.4 gigawatts of flexible generation, and about 1.2 gigawatts of power land in the pipeline, plus roughly 2 gigawatts in the U.S. It has about 500 megawatts of powered land being marketed. In July, the CEO noted that Portuguese grid connection requests totaled 4.6 gigawatts — “the 4.6 GW is indeed quite impressive” — Miguel Stilwell d'Andrade, Chief Executive Officer · 2026-07-30 — though the process is still about awarding capacity, not signing EDP contracts.

That is the tension. The global tape has turned against direct AI infrastructure: the AI data center basket is down roughly 29% over 90 days, and data center capacity names are down more than 40%. EDP is selling the indirect utility adjacency — land, interconnection, renewables, networks — which should be less capital-intensive but is also less proven. Asked about timing on the Portuguese MOUs, the CEO would only say: “we can expect certainly over the next 6 to 12 months that we would have some visibility on that” — Miguel de Andrade, CEO · 2026-11-06. Until a contract is signed, this is optionality, not earnings.

The succession question

The real change on this call is governance. After 25 years at EDP and six as CEO, Miguel Stilwell d'Andrade is leaving at the next AGM. He framed it as a natural handover:

after more than 25 years at EDP and 15 years at the Executive Board and the last 6 years as CEO, I've communicated I won't be standing or serving another term. So I'll be stepping down when my current mandate comes to an end at the next year's AGM.

Bottom line

EDP is a large-cap utility with a genuine regulated-growth engine, a hydro spread trade that is structurally supported, and a data-center option that is still an option. The third upgrade is real, and the network capex story is the most durable part of it. But the market has already heard the data-center pitch for several quarters, and the CEO exit leaves the post-2028 bridge unwritten. Until a powered-land deal is signed or a new CEO sets out the next plan, this is a solid operating story rather than a re-rating one. The price tape provided for EDP is blank, so this is a narrative-and-fundamentals call, not a momentum call.