Kepler cuts Redeia as regulatory proposal limit opex and capex efficiencies

** Kepler Cheuvreux cuts Spanish electricity grid operator Redeia RED to "hold" from "buy" citing "disappointing" regulatory proposal

** The broker notes that the CNMC's proposals on electricity transmission make it difficult for the company to capture operating expenses and capex efficiencies

** "The remuneration proposal for work-in-progress is worse than expected," it adds, as the WIP remuneration scheme will only cover about 40% of the projects and about 3% remuneration

** It adds that this situation implies that allowed returns will be difficult to achieve multi-year projects

** The broker cuts its EBITDA and net profit estimates over 2026-31 by an average of 3% and 5%, respectively

** A lower EPS estimate leads it as well to cut its dividend payout projection from 86% in 2025 to 67% in 2030, which compares with 74% it had assumed earlier