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EDF: still a buyer, UBS trims target price.

(CercleFinance.com) - UBS has not given up on the EDF stock and this morning confirms its buy rating on the share of the French electricity power group EDF.

The broker asks whether it is still the right time to buy the share after it cut its earnings estimates for 2018. In the report, UBS thinks so. It has however, trimmed its 12-month target price from 14 euros to 13 euros.

Indeed, the "profit warning" for 2018 that EDF made at its meeting on Monday, resulted in a sharp 10% fall in the share price. However, UBS notes that this warning has been caused by extraordinary items, and also by the expectation that the strong recovery in electricity prices will not translate into earnings before 2019 - or even later.

Admittedly, UBS says that this setback will delay by another year the strong rebound in expected earnings. Analysts have therefore cut their target price for the share, although they believe that the "recovery" scenario still seems to be in place. Indeed, the group should take advantage of the rise in the price of CO2, which will be induced by the European reform announced last week.

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