Deutsche Bank upgraded Enagas to “hold” from “sell” after the Spanish regulator released a draft framework setting the company’s revenues for 2027-32, with proposals coming in above prior expectations. The target price was raised to €16.30 from €12, while the last close stood at €17.14.

The draft framework is expected to increase average revenues by about €80 million per year over the regulatory period compared with 2026 levels, despite limited investment, analyst James Brand said. “The proposals are much better than we and the market anticipated,” he said.

Key elements in the draft included a higher cost allowance, which was raised to €225 million from €170 million, compared with expectations for an increase at best to €200 million. 

The framework also included stronger asset life extension incentives, with an uplift of around €20 million per year on average versus prior expectations.

Additional components included recovery of prior cost underperformance of about €44 million per year and new incentives worth around €5 million per year.