European utilities: DB repositions to capture undervalued growth

Terna Energy SA

22/06/2021 11:50

** Deutsche Bank prefers European utilities with strong
regulatory asset base growth and singles out integrated
utilities with scope for strong investment-driven growth 
    ** The broker upgrades Italian power grid operator Terna
 TRN.MI  to "buy" from "hold", Italgas  IG.MI  to "hold" from
"sell" as equity returns could be in the low double-digit
percentages, attractive within a peer group content
    ** At the same time, DB cuts United Utilities  UU.L  and
Pennon  PNN.L  to "hold" from "buy", and Red Electrica  REE.MC 
to "sell" from "hold"
    ** For integrated utilities, the brokerage upgrades British
power producer SSE  SSE.L  to "buy" from "hold" and downgrades
Europe's biggest wind power generator Iberdrola  IBE.MC  to
"hold" from "buy"
    ** DB sees a lot more near-term catalysts for SSE, and while
there are some catalysts for Iberdrola, these seem likely to be
less material
    ** "Broadly, we remain optimistic that investments in both
networks and renewables should create value," DB adds, citing
opportunities for attractive investment-driven growth

 (Reporting by Juliette Portala)
 ((juliette.portala@tr.com))