The investment picture of DEI continues to strengthen, with the group attracting the interest of major international portfolios that see significant growth potential in the coming years. Investments in the energy transition, the expansion of the production base and the modernization of infrastructure create, according to market estimates, a positive backdrop for the company’s future course.

In this context, Morgan Stanley initiates coverage of DEI’s stock with an “overweight” recommendation and a price target of €27, expressing a positive view on the group’s medium-term prospects.

The price target implies an upside potential of approximately 14% compared to current trading levels, as the stock is trading close to €23.7, reflecting confidence in the company’s growth prospects.

Investments supporting growth

The positive assessment is mainly based on the extensive investment program implemented by DEI, focusing on the development of Renewable Energy Sources (RES) projects, the upgrade and expansion of networks, and the overall restructuring of its energy portfolio.

At the same time, it is estimated that DEI is in a strong position to benefit from the returns of these investments in the coming years, improving both its operational performance and its overall financial profile.

Positive expectations also concern the group’s profitability and cash flow trajectory, as the implementation of the investment plan is expected to create additional value for shareholders and strengthen its growth dynamics.

Integrated activity: the main growth driver

The integrated activity of DEI remains the group’s main growth driver and, in our view, is the segment where most of the additional value creation will occur in the coming years.

Management forecasts that EBITDA from the integrated activity will increase from €1.3 billion in 2025 to €2.4 billion in 2028 (Morgan Stanley estimate: €2.3 billion) and to €3.3 billion by 2030 (Morgan Stanley estimate: €2.7 billion). This corresponds to a compound annual growth rate (CAGR) of around 21% over 2025–2030 (Morgan Stanley estimate: 16.5%), with this segment representing approximately 72% of the group’s total EBITDA by the end of the business plan.

As expected, this segment will also absorb the majority of DEI’s investments. Specifically, 69% of the total €24.2 billion investment program for 2026–2030 will be allocated to the integrated activity.

Of this amount, the company estimates that around 61% will be invested in wind and solar projects, 13% in flexible power generation units, 9% in hydropower projects and 7% in energy storage infrastructure. By contrast, the electricity supply segment is expected to absorb only 7% of the investments in this activity.

The strategic logic of the vertically integrated business model is clear. The retail activity provides access to customers, greater demand visibility and acts as a natural hedge against wholesale price volatility. At the same time, power generation and energy management create significant operational leverage.

DEI remains the largest electricity supplier in Greece, with a market share of around 50% and a total of approximately 8.6 million retail customers at group level. It also maintains a strong presence in Romania, where it ranks second in the retail market with a share of around 15%.

DEI combines leading positions in generation, retail supply and electricity distribution in Greece and Romania, giving it a more balanced risk profile compared to a pure generator operating in the wholesale market.

The regulated distribution activity provides earnings predictability, while retail ensures a large customer base through which it can absorb part of the increase in its generation capacity. This is important, as the company still structurally shows a generation shortfall, supplying more electricity to retail customers than it produces (2025 estimate: production 21 TWh vs supply 32 TWh).

As new RES, storage and flexible generation units are added, DEI can reduce its exposure to the wholesale market, improve hedging strategy and capture more value across the entire electricity value chain.

Romania has already become a significant second market for the group (around 22% of consolidated EBITDA), with PPC holding leading positions in renewables, distribution and retail following the acquisition of Enel assets.

The group has also entered Italy, Bulgaria and Croatia, maintaining further optionality in Central and Southeastern Europe (CSEE). The investment rationale is clear: supportive demand growth, decommissioning of old fossil-fuel units, limited interconnections and structurally higher regional electricity prices.

Regarding data centers, the analysis notes that this activity could become a significant additional source of value if hyperscaler demand materialises, with management considering potential capacity of 2 GW in Greece (included in the bullish scenario) and an additional 2 GW in other markets (not included in the bullish scenario).

Despite the re-rating of the stock and its strong performance since the beginning of the year, analysts still see further upside potential to the €27 price target by December 2027.

The main downside risk relates to execution of the business plan: delays, cost increases, permitting bottlenecks, lower RES capture prices, production curtailment, weaker returns from new generation units, softer data center demand or increased regulatory pressure could weaken the investment case.

As analysts note, they may be too conservative if DEI executes its plan faster than expected, if regional electricity markets remain tighter for longer, if data center contracts materialise earlier, or if returns from RES and storage prove higher than forecast.