In the past few sessions the Iberdrola's share has suffered a sharp fall and now is coming back on support level.
Listed in Madrid, Iberdrola generates, distributes and trades electricity in the United Kingdom, United States, Spain, Portugal and Latin America. The Company specializes in clean energy and more specifically wind power.
After several weeks of horizontal fluctuation within the medium-term range 4.42 / 4.95 EUR, the stock comes to the lower bound of this range. Technical indicators are in oversold zone. The support area of 4.42 EUR could breed a positive reaction for the coming sessions and allow a rebound towards the short-term resistance of 4.66 EUR and then medium-term target price will be around 5 EUR.
From a fundamental viewpoint, analysts have revised slightly downward their earnings forecasts, with estimated earnings per share for this year by consensus of 0.5 EUR and 0.52 EUR for next year. However the security is weak valued with price earnings ratio of 8.96 for this year, and 8.59 for next year.
The technical pattern offer a good opportunity for active investors to buy above 4.4 EUR. The potential drop is limited and the timing seems ideal to benefit of technical rebound. The first target price is 4.7 EUR, and then 5 EUR. However, we shouldn't continue this strategy under 4.3 EUR, in fact the downwards trend could restart.