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Iberdrola (BME:IBE) Could Be 2% Undervalued On Avangrid AI Grid Push

Simply Wall St · 2d ago

Iberdrola (BME:IBE) is back in focus after group subsidiary Avangrid expanded its use of artificial intelligence and digital grid tools to support reliability, data driven planning, and customer service across its utility operations.

Against this AI push, Iberdrola’s share price has moved to €20.04, with a 1-day share price return of 1.65% and a year to date share price return of 7.57% pointing to gradually improving momentum. The picture looks stronger when you factor in dividends, with a 1-year total shareholder return of 31.61% and a 5-year total shareholder return of 154.58%. This suggests investors have been steadily rewarded as the group layers new technology into an already large, diversified utility platform.

Scan beyond Iberdrola’s AI push to see how other utilities are wiring up for the same trend with a curated set of 38 power grid technology and infrastructure stocks

After a strong run supported by Iberdrola’s AI story and years of solid total returns, the real tension now is simple: does the current price still offer enough upside to justify fresh risk, or has most of the reward already been taken?

Most Popular Narrative: 2% Undervalued

Iberdrola’s most followed narrative pegs fair value at about €20.52 per share, slightly above the last close of €20.04. This frames today’s price as only modestly below that estimate while investors weigh how long regulated growth and AI driven grid upgrades can keep supporting returns.

The electrification of transport, heating, and industrial sectors in both Europe and the US is expected to steadily raise electricity demand over the next decade, expanding Iberdrola's addressable market and enhancing long-term top-line and EBITDA growth prospects.

See why 83 investors see Iberdrola as 2% undervalued.

Result: Fair Value of €20.52 (UNDERVALUED)

Still, Iberdrola’s heavy dependence on regulated markets and ongoing equity and partnership funding means any shift in regulation or financing conditions could quickly challenge that optimism.

Find out about the key risks to this Iberdrola narrative.

Another View On Iberdrola's Valuation

The fair value estimate of €20.52 presents Iberdrola as slightly undervalued on the consensus narrative, yet the current P/E of 23.3x tells a different story. That ratio sits above the fair ratio of 22.9x, the European electric utilities average of 15.9x, and a 19x peer average. This points to a richer price tag and less margin for disappointment. The question is whether the AI and grid narrative is strong enough for that premium to persist if sentiment cools.

For a closer look at how this premium compares with the underlying numbers, and what the fair ratio suggests the market could move toward, See what the numbers say about this price — find out in our valuation breakdown.

BME:IBE P/E Ratio as at Sep 2026
BME:IBE P/E Ratio as at Sep 2026

Next Steps

If this combination of optimism and caution around Iberdrola resonates with you, consider acting promptly and evaluating the full picture. To see both sides clearly, review the 2 key rewards and 2 important warning signs

Looking for more Iberdrola sized investment ideas?

If Iberdrola has your attention, do not stop at one stock. Use screeners to quickly surface fresh opportunities that might suit your risk and income goals.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.