EDF: Oddo assesses impact of Flamanville EPR
(CercleFinance.com) - A group of experts from the Nuclear Safety Authority (ASN) has concluded that EDF cannot leave eight welds from the Flamanville EPR in their current state, and will have to start work on this.
EDF is currently working on a late 2019 fuel loading, followed by a commissioning in 2020.
Following this information, Oddo maintains its target price unchanged at 16.50 euros, although the broker says that this risk could represent about -0.8 euros/share. The broker has also confirmed its buy rating on the stock.
If EDF actually has to resume its work on these welds, or modify safety aspects, works at the EPR site will probably be further delayed by up to 2 years according to some sources, Oddo says.
The impact of repair works is difficult to quantify, although Oddo believes that it would be reasonable to estimate them at about 500 million euros p.a.
In financial terms, such a decision could therefore impact EPS by -4% in 2020 and -7% in 2021. Meanwhile, the impact on valuation (which would include additional Capex of 1 billion euros) could be estimated at about -5.0% per share (Oddo BHF), the broker adds.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
EDF is currently working on a late 2019 fuel loading, followed by a commissioning in 2020.
Following this information, Oddo maintains its target price unchanged at 16.50 euros, although the broker says that this risk could represent about -0.8 euros/share. The broker has also confirmed its buy rating on the stock.
If EDF actually has to resume its work on these welds, or modify safety aspects, works at the EPR site will probably be further delayed by up to 2 years according to some sources, Oddo says.
The impact of repair works is difficult to quantify, although Oddo believes that it would be reasonable to estimate them at about 500 million euros p.a.
In financial terms, such a decision could therefore impact EPS by -4% in 2020 and -7% in 2021. Meanwhile, the impact on valuation (which would include additional Capex of 1 billion euros) could be estimated at about -5.0% per share (Oddo BHF), the broker adds.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.