Investing in European utilities used to be about as exciting as watching paint dry. You’d buy some shares, collect a predictable dividend, and maybe see a 3% gain if the wind blew the right way in the Mediterranean. But things have changed. If you've been watching the Iberdrola SA share price lately, you’ll notice it isn’t just drifting anymore. As of January 13, 2026, the stock has been hovering around €18.54 on the Madrid Stock Exchange. It's a massive shift from where things sat just a couple of years ago.
Honestly, it’s kinda wild.
We are looking at a company that just hit a €125 billion market cap on its 125th anniversary. That isn't just a round number. It’s a statement. But here is the thing: a lot of people are starting to wonder if the price has gotten ahead of itself. When you see a P/E ratio sitting north of 22x, you have to ask if you're paying for actual growth or just a really good story about green hydrogen and offshore wind.
What is actually driving the Iberdrola SA share price right now?
Basically, it's a tale of two businesses. You've got the "boring" regulated networks and the "sexy" renewables. Most of the recent price action comes down to Iberdrola’s massive bet on the US and the UK. They aren't just a Spanish utility anymore.
Over 60% of their recent €9 billion investment went straight into networks in those two countries. Why? Because regulated assets are like a golden goose. They provide predictable, inflation-linked returns that Wall Street and European investors absolutely crave in a volatile market. In October 2025, the company actually raised its profit guidance for the year to €6.6 billion. That's double-digit growth. You don't usually see that in the utility sector.
The Network Effect
Think of the electrical grid as the toll road of the energy transition. Whether the power comes from coal or wind, it has to pass through the wires. Iberdrola owns a lot of those wires. Their regulated asset base is now pushing toward €50 billion. When the Iberdrola SA share price moves, it’s often because analysts are re-valuing these stable, cash-generating assets.
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Recent wins include:
- The full acquisition of Avangrid in the US.
- Buying up the remaining stake in Electricity North West (ENW) in the UK.
- Massive new transmission projects like the Eastern Green Link.
The Dividend Trap vs. The Dividend Reality
You've probably heard that Iberdrola is a dividend machine. It’s true, but the way they do it is... well, it’s complex. They use a "Flexible Remuneration" system.
On January 8, 2026, they bumped the interim dividend to €0.253 per share. That’s an 8% increase. If you’re a long-term holder, that feels great. But if you’re looking at the Iberdrola SA share price through the lens of a pure yield hunter, you might be disappointed. The current yield is around 3.5%. Compared to some other European utilities that pay 5% or 6%, Iberdrola looks "expensive."
The reason the yield is lower isn't because they are stingy. It's because the stock price has run up so much. Investors are paying a premium for the quality of the earnings, not just the payout.
Is the stock overvalued in 2026?
This is where it gets spicy. Not everyone is a fan.
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Morningstar recently maintained a fair value estimate of around €15.40. If you compare that to the current market price of €18.54, the stock looks significantly overvalued. Analysts like Tancrede Fulop have pointed out that while the business is solid, the market might be "excessively pricing in" the earnings outlook.
Then you have the green hydrogen gamble. Iberdrola is building Spain’s largest green hydrogen plant in Castellón with bp. They are also working with H2 Green Steel on a massive 1GW facility. These are "moonshot" projects. If they work, they change the game. If they don't? That’s a lot of capital tied up in technology that hasn't fully scaled yet.
Let's look at the numbers
- P/E Ratio: ~22.2x (High for the sector)
- Net Profit Target: €7.6 billion by 2028
- Market Cap: ~€125 billion
- Projected EPS Growth: ~12% per annum over the next three years
If you're a value investor, these numbers might make you sweat. If you're a growth-at-a-reasonable-price (GARP) investor, you might think it's just getting started.
What most people get wrong about Iberdrola
People think Iberdrola is a "green" play. It is, but that’s only half the story.
The real secret to the Iberdrola SA share price resilience is their asset rotation strategy. They are masters at selling off "mature" assets—like their recent €4 billion exit from certain Mexican gas plants—and reinvesting that cash into higher-growth areas. It keeps the balance sheet clean. They managed to drop their net debt by billions recently, even while spending record amounts on new projects.
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It’s a circular money machine. Sell old, buy new, regulate the returns.
Actionable insights for your portfolio
If you're holding or looking to buy, keep your eyes on these specific triggers:
- The February 25, 2026 Results: This is the big one. The company will report its full-year 2025 numbers. If they beat that €6.6 billion profit guidance, expect the share price to test new highs near €19.50.
- Interest Rate Shifts: As a utility with significant debt (around €48 billion), Iberdrola is sensitive to rates. If the ECB or the Fed starts talking about hikes again, the stock will likely retreat.
- US Regulatory Decisions: Watch the rate cases for Avangrid in New York and New England. These decisions literally dictate how much profit Iberdrola can make from its US wires.
Don't just look at the ticker symbol. Watch the CAPEX. Iberdrola plans to invest €41 billion through 2026. If they can maintain their 17% profit margins on those investments, the current "high" price might actually look like a bargain in two years.
Next Steps for Investors:
- Check the ex-dividend date: The most recent was January 12, 2026. If you missed it, the next big opportunity to capture the payout will be the final dividend announcement later this year.
- Compare the P/E: Look at Iberdrola versus Enel or NextEra Energy. Iberdrola often trades at a premium to European peers but a discount to US giants.
- Set a limit order: If the "overvalued" camp is right, a pullback to the €16-€17 range is possible. Setting a buy order there allows you to enter at a more traditional utility valuation while still getting that 12% projected growth.