HSBC prefers EU electricity networks, integrated utilities; sees risks for renewables
** For 2025, HSBC prefers electricity networks and integrated utilities, as it sees higher risks for renewables, generators and gas utilities
** HSBC believes that investors would prefer shareholder returns over M&A risk for generators and lower growth integrateds, while renewables need asset rotation to manage balance sheets
** As further risks for renewables, it also points to the prospective U.S. energy policy and weaker recovery of electricity demand growth in Europe vs U.S.
** It says electricity networks are attractive with tripling investments, while gas networks face gas-to-hydrogen transition risk
** HSBC likes electric integrateds on network growth and competitive advantages vs renewables, expecting compounding growth at 9-11% total shareholder return
COMPANY | NEW RATING | OLD RATING | NEW PT | OLD PT |
|---|---|---|---|---|
EDP | HOLD | BUY | EUR 3.8 | EUR 4.4 |
EDPR | HOLD | BUY | EUR 11.7 | EUR 13.0 |
Snam | HOLD | BUY | EUR 4.9 | EUR 5.2 |
E.ON | BUY | BUY | EUR 14.8 | EUR 14.8 |
National Grid | BUY | BUY | GBPp 1180.0 | GBPp 1180.0 |
Terna | BUY | BUY | EUR 9.1 | EUR 9.0 |
SSE | BUY | BUY | GBPp 2150.0 | GBPp 2150.0 |
Iberdrola | BUY | BUY | EUR 15.9 | EUR 15.9 |
Endesa | BUY | BUY | EUR 24.6 | EUR 24.6 |
Enel | BUY | BUY | EUR 7.9 | EUR 7.9 |
Veolia | BUY | BUY | EUR 37.0 | EUR 38.0 |
Engie | HOLD | HOLD | EUR 17.3 | EUR 17.3 |
RWE | BUY | BUY | EUR 38.0 | EUR 39.0 |
Ecoener | BUY | BUY | EUR 5.5 | EUR 5.5 |
Orsted | HOLD | HOLD | DKK 420.0 | DKK 440.0 |
Acciona Energia | HOLD | HOLD | EUR 22.5 | EUR 22.5 |
Centrica | HOLD | HOLD | GBPp 140.0 | GBPp 130.0 |
Drax | HOLD | HOLD | GBPp 620.0 | GBPp 620.0 |
Reporting by Joao Manuel Mauricio
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