HSBC sees EU utilities and renewables tipping towards green future

NextEra Energy

15/03/2023 12:08

** As HSBC expands its coverage of companies within European
utilities and renewables sector, it underlines that energy
transition determines every step of the value chain 
    ** It sees "immense" green investment opportunities and adds
that close ESG, political and public scrutiny leads to fair
returns overall
    ** HSBC forecasts that Europe will exceed its increased 2030
wind and solar targets of 500GW and 600GW, respectively, with
the share of renewables rising to 72% in the power mix 
    ** "The United States is a key market for European
Renewables developers," the broker says, noting it represents
40% of renewables CAPEX on average over the next three years for
the large developers
    ** HSBC forecasts that U.S. renewables additions will rise
to 120GW by 2030 to decarbonise power and to be sustained at
these levels via electricity demand growth and green hydrogen
production
    ** As for gas network operators, the broker says that the
outlook is very different from electricity as the role of the
transported commodity – natural gas – will be much reduced in
Europe's net zero ambitions
    ** HSBC initiates coverage of 12 European utilities stocks
and rate RWE  RWEG.DE , Enel  ENEI.MI , Encavis  ECVG.DE , EDP
 EDP.LS , NextEra  NEE.N , Iberdrola  IBE.MC , Orsted
 ORSTED.CO  "buy" 
    ** Its top picks within the group are Enel with its green
self-help and focus on core markets, and REW on green momentum 
    ** The broker starts coverage on Terna  TRN.MI , Engie
 ENGIE.PA , Endesa  ELE.MC , Snam  SRG.MI , E.ON  EONGn.DE  with
a "hold" rating

 (Reporting by Joao Manuel Mauricio)
 ((JoaoManuel.VinceteMauricio@thomsonreuters.com))