Iberdrola stock closed today at €21.74, capping a steady 30 day climb of about 6.7%. Traders are reacting to a utility that just posted another solid quarter, not a turnaround story. Q3 2026 delivered net income from ongoing operations of €1,480.1m on revenue of €11,936m, with networks again doing the heavy lifting for profit. The catch is in the longer lens. Iberdrola now carries a P/E of 25.9x against lower industry multiples and a discounted cash flow value of €17.95, so the real debate is how much of that earnings strength is already priced in.
Like Iberdrola's earnings power but uneasy about paying a premium P/E for a regulated utility? Scan the 224 resilient stocks with low risk scores to see how other resilient stocks with lower risk scores compare with this kind of valuation.
Q3 2026 Earnings Summary
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Revenue (Q3 2026 vs Q3 2025):€11,936m vs. €11,120.2m (up about 7.3%)
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Net Income from Ongoing Operations (Q3 2026 vs Q3 2025):€1,480.1m vs. €1,737.0m (down about 14.8%)
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Basic EPS (Q3 2026 vs Q3 2025):€0.2288 vs. €0.2460 (down about 7.0%)
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Trailing 12 Month Net Profit Margin (Q3 2026 vs prior year):11.8% vs. 8.4% (margin higher year on year)
Skip the headline profit jump. Ask Charlie which Iberdrola network bets drive that 10% growth .
Iberdrola's Data Center Story Meets Early Reality Check
Supporters argue Iberdrola is already wiring itself into the data center and electrification build out.
"Growing demand for clean electricity from data centers and electrification, supported by more than 12 terawatt hours a year of PPAs with technology companies and a strong U.S. and European pipeline, can support long term contracted volumes and contribute to revenue and cash flow stability."
The latest quarter partly backs that vision. Adjusted EBITDA grew 7% to about €11.9b for the first nine months and adjusted net profit rose roughly 9%, with networks, not data center linked supply, providing most of the uplift. Higher procurement costs in Power & Customers show that translating demand into steady cash flow is still a work in progress.
One Narrative has put a figure on that disagreement. → See the Narrative with its lower Fair Value, assumptions and all .
Iberdrola Bear Case: Data Center Strain Still Unproven
The harsher view says Iberdrola's data center story masks grid strain and weaker profitability rather than clean upside.
"Rapid electrification from data centers and new industrial demand in the U.S. could outpace timely network upgrades and renewable additions, leading to congestion, curtailment and reliance on higher cost generation. This would pressure margins in both Networks and Renewables rather than delivering the smooth revenue uplift implied by current valuations."
Recent numbers do not yet show that squeeze. Networks delivered 15% adjusted EBITDA growth with a 14% rise in regulated asset base, helped by higher U.S. and Brazil tariffs. Margin pressure is instead visible in Power & Customers, where higher procurement costs and retail contracts locked at 2025 prices held back earnings.
Hunt Quiet Disconnects In Iberdrola's Shadow
Iberdrola's mix of solid operations and a richer P/E shows how sentiment and fundamentals can part ways. The real opportunity sits in stocks that could be undervalued before expectations reset.
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Company 1 - 29% below our estimate - expand copper output by bringing delayed deposits onstream as permits and underground development progress.
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Company 2 - 20% below our estimate - supply higher complexity circuit platforms to AI data center and defense buyers as new capacity and acquisitions integrate.
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Company 3 - 23% below our estimate - shift the mix toward higher margin healthcare seals while integrating a capsule maker with earn outs tied to execution.
Three companies from the same screener. Open every one of the 196 undervalued companies on it →
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.
Companies discussed in this article include IBE.MC .
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