# Terna (TRN.MI)

Canonical: https://gigainvestors.com/s/TRN.MI

Analysis as of: 2026-10-16T07:34:42.770Z. Financial observations: FY2013–FY2025.

Listing currency: EUR. Reporting currency: EUR.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: EUR 9.28 per share; close as of 2026-10-14.

Estimated value: low EUR 8.73 per share, central EUR 11.42 per share, high EUR 13.19 per share. Buy at or below the central value EUR 11.42 per share. Valuation as of 2026-10-16T07:34:42.770Z; scenarios are not confidence intervals.

Expected annual return: 11.8% at the stated quote. About 11.8% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; IT 10-year bond 4.5% + 4 points).

## Checklist

### understandable: pass

- 0 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 0

- Operating margin variation: 0.04×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.49×

- FY2017: 0.48×

- FY2018: 0.47×

- FY2019: 0.49×

- FY2020: 0.49×

- FY2021: 0.47×

- FY2022: 0.46×

- FY2023: 0.44×

- FY2024: 0.46×

- FY2025: 0.44×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 6.3%

- ROIC, second-lowest year: 5.8%

- Typical minus recent gross margin: -4.6 pp

- Typical gross margin (annual median): 85.9%

- Recent gross margin (lower of latest and 3-year median): 90.5%

- Years with nonpositive capital: 0

- Capital spending / revenue: 56.2%

- ROIC including acquisitions, ten-year median: 5.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 5.8%

- FY2017: 6.4%

- FY2018: 6.5%

- FY2019: 6.6%

- FY2020: 6.2%

- FY2021: 5.6%

- FY2022: 6.5%

- FY2023: 5.8%

- FY2024: 6.3%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 0.95×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: EUR 4.5B

- Net income, five-year total: EUR 4.7B

- Return on incremental invested capital: 5.7%

- Working capital / revenue, annual change: 4.1 pp

- Working capital / revenue, change between three-year averages: 31.9 pp

- Working capital / revenue, final three-year average: -14.5%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.00×

- FY2023: 0.81×

- FY2024: 1.00×

- FY2025: 0.94×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- Per-share earnings: 0.36 to 0.53 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 5-year annual growth: -0.0%

- Market cap gain: EUR 11B

- Cumulative retained earnings: EUR 2.6B

- Diluted shares, 5-year annual growth: -0.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 5.7%

- Per-share value change: EUR 0.17

- Per-share value, starting three-year median: EUR 0.36

- Per-share value, ending three-year median: EUR 0.53

- Buybacks concentrated in cheaper years (correlation): 0.20

- Average buyback yield: 0.0%

- Buyback history: 6 years

- Debt-funded buybacks: No

- Acquisition spending: EUR 433M

- Cumulative net income, 10 years: EUR 8.3B

- ROIC, first three-year median: 6.4%

Chart: Earnings per share; fiscal year observations.

- FY2016: EUR 0.39

- FY2017: EUR 0.35

- FY2018: EUR 0.36

- FY2019: EUR 0.38

- FY2020: EUR 0.39

- FY2021: EUR 0.39

- FY2022: EUR 0.43

- FY2023: EUR 0.44

- FY2024: EUR 0.53

- FY2025: EUR 0.55

### accounting: pass

- Sloan accruals: -5.1%

- Receivables to sales index (DSRI): 0.86×

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.36×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.17×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -5.8%

- FY2017: -5.9%

- FY2018: -3.5%

- FY2019: -3.0%

- FY2020: -0.8%

- FY2021: -0.2%

- FY2022: -6.4%

- FY2023: -0.9%

- FY2024: -1.5%

- FY2025: -5.1%

## Holders

## Price story

Price needs cash profits to grow 2.2% a year for ten years · sales +11.5%

Story as of 2026-10-16T10:00:02.136Z; price observation 2026-10-14.

Price needs cash profits to grow 2.2% a year for ten years

### Sales · FY2024–2025

sales +11.5%; source https://filings.xbrl.org/8156009E94ED54DE7C31/2024-12-31/ESEF/IT/0/8156009E94ED54DE7C31-2024-12-31-it/reports/8156009E94ED54DE7C31-2024-12-31-it.html; observed 2025-05-07.

- FY2016: EUR 2.0B 

- FY2017: EUR 2.2B 

- FY2018: EUR 2.3B 

- FY2019: EUR 2.3B 

- FY2020: EUR 2.4B 

- FY2021: EUR 2.5B 

- FY2022: EUR 2.9B 

- FY2023: EUR 3.1B 

- FY2024: EUR 3.6B 

- FY2025: EUR 4.0B 

### Gross margin · FY2025

gross margin 90.5%; source https://filings.xbrl.org/8156009E94ED54DE7C31/2024-12-31/ESEF/IT/0/8156009E94ED54DE7C31-2024-12-31-it/reports/8156009E94ED54DE7C31-2024-12-31-it.html; observed 2025-05-07.

- FY2016: 87.1% 

- FY2017: 84.4% 

- FY2018: 82.6% 

- FY2019: 85.6% 

- FY2020: 86.2% 

- FY2021: 83.6% 

- FY2022: 82.1% 

- FY2023: 91.7% 

- FY2024: 92.6% 

- FY2025: 90.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in utilities regulated electric; annual sales are EUR 4 billion.

- Source: https://download.terna.it/terna/Terna_2025_Annual_Report_8de9f199b1840f9.pdf (filed 2025-05-07); FY2025: revenue 4033000000; grossProfit 3649300000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 90.5% to 92.6% during 2023–25; it earns 6.3% on its capital.

- Source: https://eodhd.com/api/fundamentals/UEI.F.json#2023-12-31 (filed 2025-05-07); FY2023: grossProfit / revenue = 91.7%.

- Source: https://eodhd.com/api/fundamentals/UEI.F.json#2024-12-31 (filed 2025-05-07); FY2024: grossProfit / revenue = 92.6%.

- Source: https://eodhd.com/api/fundamentals/UEI.F.json#2025-12-31 (filed 2025-05-07); FY2025: grossProfit / revenue = 90.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-05-07); 10-year return on capital observations [[2016,0.057874704830555526],[2017,0.06438240149790415],[2018,0.06464821355451565],[2019,0.06566740597604628],[2020,0.062458366264356406],[2021,0.056289349465162404],[2022,0.06544114485362337],[2023,0.05773417152848926],[2024,0.06256351582867069]]; median 0.06256351582867069. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Earns 5.7% on new investment; paid dividends in 10 of 10 years.

- Source: https://eodhd.com/api/fundamentals/UEI.F.json#2016-12-31 (filed 2025-05-07); FY2016: growth capex 0; upkeep 797800000; owner earnings 762200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/UEI.F.json#2017-12-31 (filed 2025-05-07); FY2017: growth capex 0; upkeep 864900000; owner earnings 826800000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/UEI.F.json#2018-12-31 (filed 2025-05-07); FY2018: growth capex 0; upkeep 992500000; owner earnings 314100000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/api/fundamentals/UEI.F.json#2019-12-31 (filed 2025-05-07); FY2019: growth capex 161001278.70563674; upkeep 959998721.2943633; owner earnings 374901278.70563674. Growth capex / owner earnings = 0.4294497987883658.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-05-07); FY2020: growth capex 475827697.3074162; upkeep 812372302.6925838; owner earnings 608327697.3074162. Growth capex / owner earnings = 0.7821897628753839.

- Source: https://query2.finance.yahoo.com/ws/fundamentals-timeseries/v1/finance/timeseries/TRN.MI (filed 2025-05-07); FY2021: growth capex 810200000; upkeep 664800000; cash acquisitions 32000000; owner earnings 789400000. Growth capex plus acquisitions / owner earnings = 1.0668862427159869.

- Source: https://query2.finance.yahoo.com/ws/fundamentals-timeseries/v1/finance/timeseries/TRN.MI (filed 2025-05-07); FY2022: growth capex 968600000; upkeep 736100000; cash acquisitions 0; owner earnings 857000000. Growth capex plus acquisitions / owner earnings = 1.1302217036172695.

- Source: https://eodhd.com/api/fundamentals/UEI.F.json#2023-12-31 (filed 2025-05-07); FY2023: growth capex 1322238079.5284514; upkeep 942761920.4715486; cash acquisitions 18700000; owner earnings 718338079.5284514. Growth capex plus acquisitions / owner earnings = 1.8667228116442078.

- Source: https://filings.xbrl.org/8156009E94ED54DE7C31/2024-12-31/ESEF/IT/0/8156009E94ED54DE7C31-2024-12-31-it/reports/8156009E94ED54DE7C31-2024-12-31-it.html (filed 2025-05-07); FY2024: growth capex 1748000000; upkeep 876400000; cash acquisitions 0; owner earnings 1061900000. Growth capex plus acquisitions / owner earnings = 1.6461060363499387.

- Source: https://download.terna.it/terna/Terna_2025_Annual_Report_8de9f199b1840f9.pdf (filed 2025-05-07); FY2025: growth capex 2330744815.696973; upkeep 1015255184.3030272; owner earnings 1042644815.6969728. Growth capex / owner earnings = 2.2354159159549924.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-05-07); Incremental return on capital 0.05665646674272363, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-05-07); Dividend observations: [[2016,406200000],[2017,418400000],[2018,451100000],[2019,475200000],[2020,526100000],[2021,546700000],[2022,595800000],[2023,671500000],[2024,690600000],[2025,814100000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://download.terna.it/terna/Terna_2025_Annual_Report_8de9f199b1840f9.pdf (filed 2025-05-07); FY2025: cash repurchases 9000000 EUR.

### What the price says

The price assumes cash profits grow 2.2% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2025-05-07); Ten-year compound average after fade. Initial solved rate 0.01891041462093812. Price 9.277999877929688; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03.  Closing-price date 2026-10-14.

## Monthly share-price history (EUR per share)

- 2016-11: EUR 4.09 per share

- 2016-12: EUR 4.35 per share

- 2017-01: EUR 4.06 per share

- 2017-02: EUR 4.37 per share

- 2017-03: EUR 4.65 per share

- 2017-04: EUR 4.63 per share

- 2017-05: EUR 5.03 per share

- 2017-06: EUR 4.73 per share

- 2017-07: EUR 4.83 per share

- 2017-08: EUR 4.96 per share

- 2017-09: EUR 4.94 per share

- 2017-10: EUR 5.18 per share

- 2017-11: EUR 5.20 per share

- 2017-12: EUR 4.84 per share

- 2018-01: EUR 4.85 per share

- 2018-02: EUR 4.56 per share

- 2018-03: EUR 4.75 per share

- 2018-04: EUR 4.98 per share

- 2018-05: EUR 4.53 per share

- 2018-06: EUR 4.63 per share

- 2018-07: EUR 4.79 per share

- 2018-08: EUR 4.53 per share

- 2018-09: EUR 4.60 per share

- 2018-10: EUR 4.57 per share

- 2018-11: EUR 4.94 per share

- 2018-12: EUR 4.95 per share

- 2019-01: EUR 5.37 per share

- 2019-02: EUR 5.47 per share

- 2019-03: EUR 5.65 per share

- 2019-04: EUR 5.34 per share

- 2019-05: EUR 5.47 per share

- 2019-06: EUR 5.60 per share

- 2019-07: EUR 5.50 per share

- 2019-08: EUR 5.71 per share

- 2019-09: EUR 5.89 per share

- 2019-10: EUR 5.92 per share

- 2019-11: EUR 5.83 per share

- 2019-12: EUR 5.95 per share

- 2020-01: EUR 6.30 per share

- 2020-02: EUR 5.99 per share

- 2020-03: EUR 5.77 per share

- 2020-04: EUR 5.72 per share

- 2020-05: EUR 6.07 per share

- 2020-06: EUR 6.12 per share

- 2020-07: EUR 6.31 per share

- 2020-08: EUR 6.06 per share

- 2020-09: EUR 5.97 per share

- 2020-10: EUR 5.80 per share

- 2020-11: EUR 6.27 per share

- 2020-12: EUR 6.25 per share

- 2021-01: EUR 5.99 per share

- 2021-02: EUR 5.77 per share

- 2021-03: EUR 6.44 per share

- 2021-04: EUR 6.13 per share

- 2021-05: EUR 6.25 per share

- 2021-06: EUR 6.28 per share

- 2021-07: EUR 6.70 per share

- 2021-08: EUR 6.70 per share

- 2021-09: EUR 6.14 per share

- 2021-10: EUR 6.44 per share

- 2021-11: EUR 6.58 per share

- 2021-12: EUR 7.11 per share

- 2022-01: EUR 6.95 per share

- 2022-02: EUR 7.34 per share

- 2022-03: EUR 7.79 per share

- 2022-04: EUR 7.77 per share

- 2022-05: EUR 7.89 per share

- 2022-06: EUR 7.49 per share

- 2022-07: EUR 7.48 per share

- 2022-08: EUR 7.10 per share

- 2022-09: EUR 6.25 per share

- 2022-10: EUR 6.71 per share

- 2022-11: EUR 7.31 per share

- 2022-12: EUR 6.90 per share

- 2023-01: EUR 7.25 per share

- 2023-02: EUR 7.13 per share

- 2023-03: EUR 7.57 per share

- 2023-04: EUR 7.86 per share

- 2023-05: EUR 7.83 per share

- 2023-06: EUR 7.81 per share

- 2023-07: EUR 7.69 per share

- 2023-08: EUR 7.62 per share

- 2023-09: EUR 7.13 per share

- 2023-10: EUR 7.23 per share

- 2023-11: EUR 7.40 per share

- 2023-12: EUR 7.55 per share

- 2024-01: EUR 7.83 per share

- 2024-02: EUR 7.24 per share

- 2024-03: EUR 7.66 per share

- 2024-04: EUR 7.52 per share

- 2024-05: EUR 7.72 per share

- 2024-06: EUR 7.22 per share

- 2024-07: EUR 7.69 per share

- 2024-08: EUR 7.86 per share

- 2024-09: EUR 8.09 per share

- 2024-10: EUR 7.96 per share

- 2024-11: EUR 8.01 per share

- 2024-12: EUR 7.62 per share

- 2025-01: EUR 7.96 per share

- 2025-02: EUR 8.06 per share

- 2025-03: EUR 8.36 per share

- 2025-04: EUR 8.77 per share

- 2025-05: EUR 8.96 per share

- 2025-06: EUR 8.73 per share

- 2025-07: EUR 8.45 per share

- 2025-08: EUR 8.60 per share

- 2025-09: EUR 8.64 per share

- 2025-10: EUR 8.89 per share

- 2025-11: EUR 9.09 per share

- 2025-12: EUR 9.05 per share

- 2026-01: EUR 9.13 per share

- 2026-02: EUR 10.20 per share

- 2026-03: EUR 9.86 per share

- 2026-04: EUR 10.25 per share

- 2026-05: EUR 9.85 per share

- 2026-06: EUR 10.24 per share

- 2026-07: EUR 9.97 per share

- 2026-08: EUR 9.74 per share

- 2026-09: EUR 9.19 per share

- 2026-10: EUR 9.37 per share

## Annual estimated value (EUR per share)

- FY2017: low EUR 1.72 per share, central EUR 1.83 per share, high EUR 1.96 per share

- FY2018: low EUR 2.60 per share, central EUR 2.84 per share, high EUR 3.16 per share

- FY2019: low EUR 2.80 per share, central EUR 3.08 per share, high EUR 3.45 per share

- FY2020: low EUR 4.63 per share, central EUR 5.08 per share, high EUR 5.69 per share

- FY2021: low EUR 4.29 per share, central EUR 4.77 per share, high EUR 5.42 per share

- FY2022: low EUR 5.09 per share, central EUR 5.64 per share, high EUR 6.39 per share

- FY2023: low EUR 5.48 per share, central EUR 6.76 per share, high EUR 7.78 per share

- FY2024: low EUR 7.93 per share, central EUR 10.31 per share, high EUR 11.89 per share

- FY2025: low EUR 8.73 per share, central EUR 11.42 per share, high EUR 13.19 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original ESEF filing](https://filings.xbrl.org/8156009E94ED54DE7C31/2024-12-31/ESEF/IT/0/8156009E94ED54DE7C31-2024-12-31-it/reports/8156009E94ED54DE7C31-2024-12-31-it.html); period 2024-12-31, filed 2025-05-07.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.