RWE, Verbund and Engie with upside potential on higher power prices conditions - Barclays

VERBUND AG

25/07/2022 11:28

** Barclays sees the European Utilities sector and current
power prices as "parallel universes" citing though that the
market is underestimating the seriousness of the issues
    ** It says one-year forward baseload power prices have risen
around five-fold in most major European markets over the last
year as a result of Russia’s invasion of Ukraine and have a
tendency to rise further 
    ** However, the brokerage sees RWE  RWEG.DE  as a top pick
with an "overweight" rating as it has no meaningful nuclear or
hydro generation, and no large energy retail business, and its
Russian gas exposure is 98% less than Uniper’s, Barclays adds 
    ** It re-iterates "overweight" on Engie  ENGIE.PA  and
upgrades Verbund  VERB.VI  to "overweight" from "equal weight"
due to a combination of attractive upside potential, favourable
valuation and strong near-term catalysts
    ** The broker though cuts EDF  EDF.PA  to "equal weight"
from "overweight" following planned nationalisation at 12 euros
per share and limited upside potential

 (Reporting by Anastasiia Kozlova)
 ((Anastasiia.Kozlova@thomsonreuters.com))