CS sees Verbund shares as fairly priced, ups to 'neutral'

VERBUND AG

16/01/2023 10:04

** Credit Suisse upgrades Verbund  VERB.VI  to "neutral"
from "underperform" as it sees the Austrian hydropower
producer's stock trading at a discount compared to its sector,
the first time since 2007
    ** "We believe the current valuation better reflects the
balance of downside and upside risks," CS says
    ** The broker says the stock has fallen 14% since Dec. 1,
compared to the sector's average rise of 1%
    ** It notes the decline in German power prices since its
August peak, with them however staying at a high level at 4 to 5
times above the long term average
    ** "But hedging levels limit downside risk: Given the
hedging completed so far and revenue caps, we see limited
downside risk to the 2023 achieved power price" it adds
    ** CS says potential catalysts are the decision by the
German government to prolong the windfall tax measure before
June 2023, and a review of the power market design in the EU
 (Reporting by Tristan Chabba)
 ((Tristan.chabba@thomsonreuters.com))