EDP and EDPR Plunge, Dragging Lisbon’s PSI Lower and Testing Retail Nerves

Portuguese investors woke up to a jolt when the country’s two flagship power companies, EDP and EDPR, led the PSI—Portugal’s benchmark share index—sharply lower. A slide that started at the opening bell quickly morphed into an eye-catching sell-off, reviving a familiar question in Lisbon’s financial district: how much patience is left for strategic promises that never seem to wow the market?

Lisbon market feels the chill

The PSI spent virtually the entire morning painted red, mirroring a wider bout of caution across Europe but with a noticeably darker shade. Shortly after the opening auction the benchmark was already down more than 1%, trading around 8 391 points, and by lunchtime the losses deepened. Local traders spoke of a "mini vacuum” in buy orders after EDP sank more than 4% in the first half-hour, dragging the renewables subsidiary EDPR about 2% lower. Because the twin utilities account for roughly one-third of the PSI’s capitalisation, their wobble had an outsize impact on the index, leaving bank stocks and retailers powerless to cushion the blow.

Why utilities stumbled on a sunny Iberian morning

At first glance weather, power demand and even wholesale electricity prices offered no alarming clues. The real culprit, brokers argue, was investor disappointment with the fresh 2026-28 business plans unveiled the previous evening. Hopes had been high that the Lisbon-based group would map out an ambitious growth path akin to earlier cycles when bold renewables bets propelled the share price. Instead the new road-map looked more restrained, pledging about €12 billion in investment compared with the previous programme’s €25 billion. The shift toward greater financial discipline pleased ratings agencies but spooked equity holders hunting for rapid expansion.

Earnings that failed to impress Praça da Liberdade

The lukewarm strategy landed only hours after nine-month results painted a softer profitability picture. EDP’s net income slipped 12% year on year to €952 million, eroded by weaker one-off gains, while EDPR’s profit almost halved to €107 million despite higher revenue and EBITDA. Management blamed higher interest costs and thinner margins on asset rotations, yet those explanations provided little comfort to shareholders who had already endured a tricky year for green-energy multiples.

Continental snapshot shows Lisbon’s outlier status

Curiously, Iberian rival Iberdrola traded flat to slightly up in Madrid, while France’s Engie and Germany’s E.ON even posted intraday advances. The pan-European STOXX 600 edged higher, helped by factory and car-maker names. In other words, Thursday’s tumble was not a sector-wide capitulation but a company-specific vote of no-confidence. Market strategists in Porto noted that the GDP growth slowdown in Portugal has little to do with utilities’ earnings profile, reinforcing the view that the sell-off stemmed from self-inflicted wounds.

Analyst verdict: downgrades and muted enthusiasm

Equity research desks moved swiftly. Goldman Sachs cut its stance on both tickers within hours of the results, while Mediobanca, CaixaBank BPI and JP Morgan reiterated neutral calls but trimmed their price targets to a €4–4.70 range for the parent company. For EDPR, most brokers settled around €13 per share, a level that implies limited upside from current quotes. João Queiroz, head of trading at Banco Carregosa, summed up the prevailing mood: without asset disposals “the earnings numbers do not stack up,” he said, warning that higher rates make those sales harder and cheaper.

What comes next for Portuguese shareholders

With bond yields still elevated and the European Central Bank signalling a longer wait before monetary easing, the utilities’ reliance on debt-fuelled capex looks costlier. At the same time, Lisbon’s government is finalising new offshore wind auctions that could redirect capital toward premium projects—an opportunity the market might reward if management articulates clearer visibility on returns. Until then, volatility is likely to remain above average, meaning that for many small Portuguese savers the coming weeks could test nerves as well as convictions about the country’s most recognisable corporate names.