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RWE: shares rise 3 percent after UBS upgrade.

(CercleFinance.com) - Shares of German utility giant RWE are up over 3% on Wednesday after UBS upgraded its rating on the stock from "neutral" to "buy," saying that the shares could outperform again in 2018.

In a research report issued this morning, the brokerage firm reminds investors that it has been cautious on the stock until now due to coal and carbon risks.

"But after the recent sell off (15% in 2 weeks) and with coalition talks suspended, we now see limited downside risk on coal," UBS writes in the report.

The broker also highlights the positive gearing to interest rates, which it believes could lead the shares to outperform peers next year.

UBS has also set a new target price of 24.80 euros, up from 17.50 euros previously, meaning upside potential of 25%.

RWE shares are currently up 3.1% at 20.2 euros in morning trading this Wednesday on Frankfurt's DAX index, after hitting a session high of 20.3 euros.

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