EDF: UBS more optimistic after Energy Plan
(CercleFinance.com) - UBS has confirmed its buy rating on the share of the electro-nuclear group EDF the day after the presentation of the French government's multi-year energy plan.
The broker has raised its 12-month target price from 16 euros to 17 euros, meaning upside potential of over 15%.
Indeed, this strategic plan is more favourable for nuclear energy than analysts expected. The planned reactor closures are fewer than UBS feared. In addition, the share of atomic energy in the French energy mix should indeed be reduced to 50% - although in 2035 - and no longer in 2025. Finally, all this will be accompanied by a new regulation relating to nuclear energy to protect consumers from price increases, although this also intends to provide EDF with low production costs.
In terms of renewable energies, which EDF is also exposed to, "the valuation benefits for the stock in this scenario could be material," UBS says - both regarding expected growth in capacity and subsidies.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The broker has raised its 12-month target price from 16 euros to 17 euros, meaning upside potential of over 15%.
Indeed, this strategic plan is more favourable for nuclear energy than analysts expected. The planned reactor closures are fewer than UBS feared. In addition, the share of atomic energy in the French energy mix should indeed be reduced to 50% - although in 2035 - and no longer in 2025. Finally, all this will be accompanied by a new regulation relating to nuclear energy to protect consumers from price increases, although this also intends to provide EDF with low production costs.
In terms of renewable energies, which EDF is also exposed to, "the valuation benefits for the stock in this scenario could be material," UBS says - both regarding expected growth in capacity and subsidies.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.