JPM cautious on EU utilities, sees no demand acceleration near-term

Endesa SA

12/12/2025 12:30

** J.P. Morgan turns cautious on European utilities, saying the anticipated significant turnaround in European electricity demand would happen only gradually and towards end of the decade

** "Investors will need to be patient to see the benefit in volumes and prices," it says, adding it expects power demand growth of 1.4% compound annual growth rate (CAGR) in 2023-2030

** Data centers (DCs) and green hydrogen are powerful drivers, but JPM warns growth will not mimic that of the U.S. due to permitting and network connection hurdles

** JPM names German utility RWE RWEG.DE and British peer SSE SSE.L as its top picks, both rated "overweight" on strong near-term earnings growth

** It upgrades British Gas owner Centrica CNA.L to "overweight" from "neutral" on digital transformation benefits

** JPM downgrades Finnish energy group Fortum FORTUM.HE to "underweight" from "neutral" as it believes the market is "over-optimistic on tightening of supply/demand in the Nordic power markets"

** It also lowers British water stocks Pennon PNN.L, Severn Trent SVT.L and United Utilities UU.L to "neutral" from "overweight", citing limited positive catalysts for the sector in 2026

COMPANY
NEW RATING
OLD RATING
Centrica
overweight
neutral
Drax DRX.L
overweight
overweight
E.ON EONGn.DE
overweight
overweight
Endesa ELE.MC
neutral
neutral
Enel ENEI.MI
overweight
overweight
Engie ENGIE.PA
overweight
overweight
Fortum
underweight
neutral
National Grid NG.L
overweight
overweight
Orsted ORSTED.CO
neutral
---
Pennon
neutral
overweight
Severn Trent
neutral
overweight
RWE
overweight
overweight
SSE
overweight
overweight
United Utilities
neutral
overweight

(Reporting by Marta Frackowiak)

((marta.frackowiak@thomsonreuters.com))