Performance and fundamentals no longer at odds - MS upgrades ERG

Erg SA

04/04/2023 08:10

** Morgan Stanley upgrades Italian energy group ERG  ERG.MI 
to "equal-weight" from "underweight" saying the stock's current
valuation is in line with fair value after sell-off in the past
four months
    ** It cites quality of assets and less uncertainty around
2023 wholesale intervention measures also in Italy
    ** The broker says geographical diversification helps ERG's
visibility and quality of assets remain solid
    ** MS says ERG's renewables pipeline lags peers but is
fairly priced
    ** "Our EPS estimates increase, on average, 8% over 2023-25
and our price target remains €29/sh given offsetting capex
increases," it says
    ** Out of eight analysts that cover ERG, seven rate the
stock "strong buy" or "buy" and ​one "hold"
    ** The stock rises 2.5% in morning trade, cutting YTD losses
to around 2%

 (Reporting by Alessandro Parodi)
 ((alessandro.parodi@thomsonreuters.com))