SSE : Fortune favours the brave

Research evidence excerpt

SSE : Fortune favours the brave

EQUITIES

UTILITIES & CLEAN ENERGY

SSE OUTPERFORMPRICE* 2,337p  TARGET PRICE 2,790p (UPSIDE 19%) TARGET 12%PRICE EPS03/26e2% EPS 03/27e-1%

SSE ADR OUTPERFORMPRICE* USD31.2  TARGET PRICE USD37.5 (UPSIDE 20%) TARGET 12%PRICE EPS03/26e2% EPS 03/27e-1%

Fortune favours the brave

UK political risk is now seen by many as an insurmountable barrier for the SSE investment case. But21 MAY 2026

Securities Research Report the quantum of rerating potential if political outcomes turn out to be more benign than feared, is

Production time: 05:25* (London time)

extreme: our current c.20% TP upside could become nearly 45% if UK RfR fell back to where they

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were 18 months ago. Meanwhile, the shares are now at a 40%+ PE discount to Iberdrola despite

Harry Wyburd similar business mix exposure. We expect the coming weeks to be volatile, but the shares are nowBNP Paribas London Branch

(+44) 203 430 8665 a deep value electrification play with significant upside gearing to any change in political backdrop.

harry.wyburd@uk.bnpparibas.com

UK politics: dark for now but the ground shifts weekly

The prospect of UK utilities nationalisation if Andy Burnham becomes Prime Minister is now hanging

over the multiples of all the UK utilities. But as we argued here, we think the likelihood of a full

nationalisation of SSE and the other listed utilities is low. The enterprise value of our UK-listed

coverage alone (i.e. excluding private and foreign-listed assets) is over £200bn; taking this onto the

govt. balance sheet would add over 7% to the £2.9tn national debt, whilst the companies’ capex-

heavy negative annual FCF would increase the budget deficit by c.10%, or nearly 0.5% of GDP.