IREN shares jump on strong earnings outlook

Shares of Italian utility Iren SpA surged 6% in Milan trading on Tuesday after the company upgraded its full-year earnings outlook, citing stronger operational performance and improved grid reliability.

Iren raised its 2024 earnings guidance to €650 million from a prior forecast of €600 million, attributing the revision to higher power generation volumes and reduced outages. The company, which operates in electricity, gas and district heating, also highlighted improved operational efficiency in its core markets of Piedmont, Liguria and Emilia-Romagna.

Analysts at Intesa Sanpaolo noted that the upgrade reflects "a robust operational performance" and suggested that Iren’s diversified business model is proving resilient amid volatile energy markets. The bank maintained a neutral rating but raised its price target to €2.40 from €2.20.

Iren’s shares, which had underperformed the broader Italian utilities sector year-to-date, gained momentum following the announcement. The stock closed at €2.35, up 6.2%, outpacing the FTSE MIB Utilities index, which rose 1.8%.

The company’s management cited favorable weather conditions, which boosted hydroelectric output, and a stable regulatory environment as key drivers of the improved outlook. Iren also reaffirmed its commitment to its 2024 dividend policy, targeting a payout ratio of 70% of net profit.

The upgrade comes as European utilities navigate a period of stabilization after years of volatility driven by energy crises and geopolitical tensions. Iren’s revised guidance suggests a return to more predictable earnings, which could support investor confidence in the sector.