ENGIE (+) : In a sweet spot: Sector top pick

Research evidence excerpt

ENGIE (+) : In a sweet spot: Sector top pick

EQUITIES

UTILITIES & CLEAN ENERGY

ENGIE OUTPERFORMPRICE* EUR27.3  TARGET PRICE EUR33.5 (UPSIDE 23%)

In a sweet spot: Sector top pick

Engie is in a sweet spot: it is thematically exposed to electrification and R-S-N-G; we see tangible21 MAY 2026

Securities Research Report upside to near and longer-term consensus; and it still trades at a discount just as investors are

Production time: 05:17* (London time)

becoming more valuation-conscious in the sector. Reiterate O/P and sector top pick.

Research Analysts & Publishing Entities

Harry Wyburd Tangible signs of upside to guidance / consensus

BNP Paribas London Branch In the short term, we think the stock has yet to price positive earnings comments from the CFO at

(+44) 203 430 8665

harry.wyburd@uk.bnpparibas.com 1Q: we are 4-5% ahead of cons. EPS after raising numbers earlier in May. Longer term, our deep-

dive work has identified further upside to consensus from 1) overly conservative disposal dilution and

cost savings assumptions within current guidance, 2) positive impacts on supply & trading related to

the Middle East conflict, and 3) remaining balance sheet optionality after the conservatively financed

UKPN deal.

Still amongst the cheapest stocks in the sector in spite of transformed earnings mix

Reinvestment of Engie’s 20%+ pre-capex FCF yield into renewables, and the €18bn UKPN

acquisition in Feb, have led to a step change in earnings growth outlook, earnings quality and

simplification over the last few years, now driving a 7% forward EPS CAGR on our above-cons.

numbers. Moreover, the forthcoming full exit of Belgian nuclear will further reduce exposure to volatile

nuclear provisions and power prices. Against this, the recent re-rating of the shares has further to go