Why this stock?
In Focus: Metlen’s H126 results (6 August) marked a decisive recovery from FY25: revenue €3.99bn (+11% y-o-y), EBITDA €550m (+23%, 3% ahead of consensus) and EPS €2.18 (+20%). With FY25 project execution issues behind it, FY26 EBITDA guidance of €1.0–1.15bn was reiterated, with management conceding on the call that the H1 print could have supported an upgrade.
Momentum: The medium-term EBITDA target of €1.9–2.08bn (2028–30) is intact, and the newer engines are ahead of plan: 25% of the 50t gallium capacity is already contracted with the metal above $3,000/kg (vs a $1,000/kg Capital Market Day assumption), defence EBITDA is guided to c €85m in FY27 with the sixth unit implying EBITDA of €150–180m. Circular-metals pilot recoveries have beaten expectations.
Valuation: 11.4x FY26e P/E falling to 9.3x in FY27e, with the yield rising from 3.1% to 4.3%. Edison’s unchanged 50/50 discounted cash flow/sum-of-the-parts approach gives an indicative €72.0/share, c 53% upside. Key risks: execution in the newer metals businesses, aluminium and energy prices beyond the hedge book, and project delivery (the FY25 Protos losses are a reminder).
Catalysts ahead: Shareholder approval of the concessions/public-private partnership demerger (expected by 30 September); a potential IPO of Metka (infrastructure) flagged as a strong possibility for H226; the first nine months of 2026 (9M26) trading update on 5 November; final completion of legacy M Power Projects before year-end; and the potential for refreshed medium-term targets in 2027 given the existing targets are well underpinned.
Why now?
Key takeaway: Edison’s 22 September update rebases FY26e EBITDA to €1,093m (+45% y-o-y), now sitting comfortably inside guidance rather than above it, rising to €1,296m in FY27e (EPS €4.17 and €5.10). The €600m buyback to June 2031 (c 9% of the market cap) is a clear statement of management’s view on value and, at c 6% of London daily volume if executed evenly, is unlikely to be insignificant.
Drivers: Aluminium and most alumina output is hedged for 2026–28 at progressively higher prices (LME averaged $3,362/t in H1). With energy costs hedged, management expects improving Metals EBITDA margins. In Energy, record gas procurement of c 32TW (+26%) and retail market-share gains support the fully integrated utility; Infrastructure & Concessions EBITDA rose 162% in H126 to €82m, exceeding management’s own expectations.
Current view: Greece is back in the developed-market club: FTSE Russell and STOXX reclassified the country from 21 September, taking Metlen into the STOXX 600, with MSCI to follow from May 2027. The shares are up c 10% over three months but still c 14% below the €55 52-week high set before February’s project-loss announcement, leaving room for the re-rating to continue.
What’s next: Management expects Metals to ‘surprise the market’ supported by price and cost hedges. Watch the 5 November update for gallium and circular-metals newsflow (scandium, germanium), demerger and Metka IPO progress, and the €25m EP.AL.ME recycled-aluminium expansion announced on 22 September (targeting 250kt capacity).
Three stocks to watch
