Barclays positive on utilities sector in 2024 on declining cost of capital

Alliant Energy

02/01/2024 14:38

** Barclays upgrades its U.S. utilities industry outlook to
"positive" from "neutral"
    ** Backdrop of utilities sector underperforming vs other
sectors in 2023 and declining cost of capital should allow
utilities to outperform in the first half of 2024, says
brokerage
    ** Utilities along with consumer staples and REITs (real
estate investment trusts), often referred to as "bond proxies"
because they have reliable dividends, took a hit in 2023 amid
rising yields
    ** "With data centers, onshoring of industrial services, EV
and electrification opportunities, we naturally see the path of
least resistance for utility demand as higher with an increased
reliance on intermittent renewables complicating the supply
trajectory" - Barclays
    ** Utilities Select Sector SPDR ETF  XLU.P  fell ~10.4% in
2023, while S&P 500 Utilities  .SPLRCU  fell 10.2%
    
    
     Company      New PT  Old PT   New Rating    Old Rating
 Alliant Energy    $53     $50    Equal weight   Overweight
     LNT.O                                      
 Evergy  EVRG.O    $56     $53     Overweight   Equal weight
   DTE Energy      $113    $106        -             -
     DTE.N                                      
     Edison        $72     $67         -             -
  International                                 
     EIX.N                                      
 Entergy  ETR.N    $104    $99         -             -
   Eversource      $65     $61         -             -
 Energy  ES.N                                   
   OGE Energy      $38     $37         -             -
     OGE.N                                      
   Southern Co     $64     $68         -             -
      SO.N                                      
   Xcel Energy     $61     $58         -             -
     XEL.O                                      
 
    

 (Reporting by Kabir Dweit)
 ((Kabir.Dweit@thomsonreuters.com))