Citi prefers stocks exposed to U.S. Inflation Reduction Act over uncertain EU action

Powercell Sweden AB (publ)

17/01/2023 14:35

** Citigroup still prefers stocks exposed to the
already-passed U.S. Inflation Reduction Act, particularly Vestas
 VWS.CO , given the uncertain outcome of a possible EU action
    ** The EU on Tuesday responded to U.S. moves to boost its
energy transition with plans to support the bloc's green
industry and back it up with funds to keep firms from moving to
the United States
    ** In the event of EU action, wind OEMs should benefit from
increased EU demand, with Vestas and Nordex  NDXG.DE  standing
out and Siemens Energy  ENR1n.DE  benefiting in the longer term,
Citi says
    ** It adds hydrogen equipment manufacturers like Ceres Power
 CWR.L , Nel  NEL.OL  and PowerCell  PCELL.ST  could see faster
growth, while EV sector could support carmakers like Volkswagen
 VOWG-p.DE , Stellantis  STLA.MI  and Renault  RENA.PA 
    ** The broker says renewable energy installations are
lagging EU targets due to permitting bottlenecks, not costs, so
a planned easing of renewables permitting would be positive
    ** It notes Chinese companies have around 5% market share of
battery EV sales in Norway and Sweden, so a "buy Europe"
provision may not only benefit EU-listed companies
 (Reporting by Diana Mandiá)
 ((diana.mandiaalvarez@thomsonreuters.com))