Bernstein sees strong growth for Southern European grid operators

REN Redes Energeticas Nacionais SGPS SA

12/04/2024 12:41

** Energy transition will drive "unprecedented growth" for
Southern European electricity and gas network operators in
coming years, Bernstein says
    ** It highlights needs for energy transition infrastructure,
changes in European gas flows and growing concerns over the
security of supply
    ** The broker prefers Italy's Terna  TRN.MI  and Spain's
Redeia  REDE.MC  on regulatory asset base (RAB) growth
    ** It ups Redeia to "outperform" from "market-perform",
expecting higher capex in the coming year, and keeps
"outperform" on Terna, seeing a potential upside to earnings
estimates
    ** It likes Snam  SRG.MI  ("outperform") among gas names
thanks to its attractive dividend yield, and says the Italian
group's RAB growth is similar to that of an electricity firm
    ** It cuts Italgas  IG.MI  and REN  RENE.LS  to
"market-perform" from "outperform" on a lack of visibility for
long-term organic growth, and despite their attractive dividend
yields

 (Reporting by Tiago Brandao)
 ((Tiago.Brandao@thomsonreuters.com;))