Upbeat Barclays names top picks for utilities sub-sectors in Europe

Elia SA

10/01/2025 09:27

** Barclays is positive on European utilities, with
regulated utilities taking the top spot among sub-sectors ahead
of vertically integrated names
    ** "We are in the foothills of a utility super-cycle," it
says, expecting 2025 to represent an earnings trough ahead of
future growth
    ** It sees possible upside surprises from balance sheet
clarity, low European expectations and flexible generation,
including introduction of capacity payments in Spain
    ** Its preferred names in regulated networks are National
Grid  NG.L , E.ON  EONGn.DE , Elia  ELI.BR , Pennon  PNN.L  and
Redeia  REDE.MC 
    ** Among integrated utilities, its top picks are Enel
 ENEI.MI  and SSE  SSE.L 
    ** Renewables is at the bottom of its sub-sector list, with
RWE  RWEG.DE  as the preferred play, with generators also among
the less preferred, with Drax  DRX.L  as top pick
    ** All the preferred stocks are rated "overweight"
    ** Barclays cuts EDP  EDP.LS  to "equal weight" from
"overweight", saying the expected volatile performance of its
renewables unit EDPR  EDPR.LS , also "equal weight", will be a
key driver for the stock

 (Reporting by Tiago Brandao)
 ((Tiago.Brandao@thomsonreuters.com;))