Portfolio

Goldman Sachs downgrades SSE after outperformance

By Michele Maatouk

Date: Tuesday 07 Jan 2020

Goldman Sachs downgrades SSE after outperformance

(Sharecast News) - Goldman Sachs downgraded shares of SSE to 'neutral' from 'buy' on Tuesday following outperformance.
It noted that since being added to the 'buy' list on 7 January 2019, the shares are up 37% versus the FTSE World Europe up 15%.

On a total return basis, SSE has risen 49% versus 28% for the Stoxx 600 utilities index over the period.

"During 2019, we observed a major step-up in public awareness of climate change issues and more countries outlining net zero policies (UK net zero by 2050). These are likely to provide 30 years of growth and regulatory stability in climate infrastructure, with most of the growth concentrated in renewable activities," Goldman said.

"Against this backdrop, SSE has de-risked its business model (via disposals) towards more visible activities (renewables & networks) and secured sizable renewable auction wins over 2019, factors that have driven the stock's re-rating, in our view."

GS said industry consolidation could provide upside, but it sees better risk/reward elsewhere. The bank lifted its price target on the stock to 1,461p from 1,369p

At 1455 GMT, the shares were down 1.5% at 1,420.50p.

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