JPM sees 2025 as transition year on power demand recharge for European utilities

Fortum Oyj

03/12/2024 10:50

** "A transition year to play a power demand recharge,"
J.P.Morgan says as it lays out is 2025 outlook on European
utilities
    ** Similar to 2024, it expects upside risks to consensus
earnings in 2025, while adds that first signals of power demand
growth should start to drive a change in the approach towards
valuations
    ** It remains neutral on the sector, expecting economic
uncertainties to affect the utilities' performance, particularly
in H1, though it sees positive momentum for earnings revisions
throughout the year
    ** Once political uncertainties clear, it predicts investors
will shift their focus to the medium-term outlook for power
demand in Europe
    ** The broker continues to prefer integrateds, and is also
positive on network equity stories, but would stay on the
sidelines on renewables despite low valuations
    ** Its top picks are Engie  ENGIE.PA , National Grid  NG.L ,
and SSE  SSE.L 
    ** Among other key companies, it mentions "overweight"-rated
Enel  ENEI.MI , Endesa  ELE.MC , RWE  RWEG.DE , and Centrica
 CNA.L 
    ** It names Redeia  REDE.MC  and Fortum  FORTUM.HE  as
stocks to avoid, citing fully priced in regulatory improvements
and more long-term oriented pick-up in demand than the market is
discounting, respectively

 (Reporting by Marta Serafinko)
 ((Marta.Serafinko@thomsonreuters.com; +48 58 769 66 00;))