We change our recommendation on EDPR from NEUTRAL to OUTPERFORM with target price at Eur 7.3.

We are revising our valuation according to new forecasts for final tariffs per country, given the change in oil and cross currencies scenarios, ongoing Opex Eur MWh and Capex Eur MW. In the main markets, Spain and US, we expect final tariffs to decrease from respectively Eur 100 MWh and $86 MWh to Eur 82 MWh and $74.5 MWh (Eur 56.4 MWh Vs Eur 58.9 MWh in 2008).