UBS sees improved conditions for European utilities in 2024

VERBUND AG

11/12/2023 13:20

** UBS sees a positive momentum for utilities in 2024,
saying that even though the sector mostly underperformed this
year, it is now slightly ahead of the market
    ** It sees a "more favourable set up" for next year, with
fewer operating problems, more support for networks, and more
capex flexibility
    ** The broker upgrades E.ON  EONGn.DE  and National Grid
 NG.L  to "buy" from "neutral", noting their shift to networks
and defensiveness 
    ** It also says RWE  RWEG.DE  ("buy") is well positioned as
sentiment around renewables recovers
    ** UBS downgrades to "neutral" from "buy" Fortum, seeing
limited growth for the Finnish group, and SSE, saying its
strategic positioning is already priced in
    ** "We see much less to be interested in on the rest of the
pure play network sector or among pure play renewables" - UBS
    ** The broker warns of downside risks for Uniper  UN01.DE 
and Verbund  VERB.VI  with a one-year forward gas price, while
European prices trend towards their lowest level since before
the war in Ukraine 

 (Reporting by Chiara Holzhaeuser)
 ((Chiara.Holzhaeuser@thomsonreuters.com))