Kepler ups ERG to 'buy' as EU Commission allows further investments in renewables
BUZZ-Kepler ups ERG to 'buy' as EU Commission allows further investments in renewables ** Kepler Cheuvreux upgrades its rating for Italy's ERG ERG.MI to 'buy' from 'hold' as regulatory changes in Europe lead to an improved outlook for the renewable energy storage sector
** The European Commission said it will allow member states to use 0.3% of GDP, out of the 1.5% of GDP of extra leeway already allowed for defence spending, to pay for investments aimed at moving away from fossil fuels to green energy
** The additional flexibility can help member state invest to improve renewable permitting, and support industrial decarbonisation through PPAs, Kepler says
** "We think the outlook for renewables has improved in Italy and in Europe, the core market of ERG, and the risk of a political intervention on the market design... has been avoided," Kepler notes
** It also raises its TP by 12.5% to €27 ($31.40) per share, adding it continues to see ERG as a delisting candidate
** Shares are up by more than 6%, outperforming a flat all-share index .FTITLMS in Milan
($1 = 0.8599 euros)
(Enrico Sciacovelli)