HSBC prefers EU electricity networks, integrated utilities; sees risks for renewables

Corporacion Acciona Energias Renovables SA

10/12/2024 13:23

** For 2025, HSBC prefers electricity networks and
integrated utilities, as it sees higher risks for renewables,
generators and gas utilities
    ** HSBC believes that investors would prefer shareholder
returns over M&A risk for generators and lower growth
integrateds, while renewables need asset rotation to manage
balance sheets
    ** As further risks for renewables, it also points to the
prospective U.S. energy policy and weaker recovery of
electricity demand growth in Europe vs U.S. 
    ** It says electricity networks are attractive with
tripling investments, while gas networks face gas-to-hydrogen
transition risk 
    ** HSBC likes electric integrateds on network growth and
competitive advantages vs renewables, expecting compounding
growth at 9-11% total shareholder return        
 COMPANY      NEW RATING  OLD RATING   NEW PT       OLD PT
 EDP          HOLD        BUY          EUR 3.8      EUR 4.4
 EDPR         HOLD        BUY          EUR 11.7     EUR 13.0
 Snam         HOLD        BUY          EUR 4.9      EUR 5.2
 E.ON         BUY         BUY          EUR 14.8     EUR 14.8
 National     BUY         BUY          GBPp 1180.0  GBPp 1180.0
 Grid                                               
 Terna        BUY         BUY          EUR 9.1      EUR 9.0
 SSE          BUY         BUY          GBPp 2150.0  GBPp 2150.0
 Iberdrola    BUY         BUY          EUR 15.9     EUR 15.9
 Endesa       BUY         BUY          EUR 24.6     EUR 24.6
 Enel         BUY         BUY          EUR 7.9      EUR 7.9
 Veolia       BUY         BUY          EUR 37.0     EUR 38.0
 Engie        HOLD        HOLD         EUR 17.3     EUR 17.3
 RWE          BUY         BUY          EUR 38.0     EUR 39.0
 Ecoener      BUY         BUY          EUR 5.5      EUR 5.5
 Orsted       HOLD        HOLD         DKK 420.0    DKK 440.0
 Acciona      HOLD        HOLD         EUR 22.5     EUR 22.5
 Energia                                            
 Centrica     HOLD        HOLD         GBPp 140.0   GBPp 130.0
 Drax         HOLD        HOLD         GBPp 620.0   GBPp 620.0
    

 (Reporting by Joao Manuel Mauricio)
 ((JoaoManuel.VicenteMauricio@thomsonreuters.com))