European Utilities: Hormuz re-opening: what to do with the sector

Research evidence excerpt

European Utilities: Hormuz re-opening: what to do with the sector

Equity Research

25 June 2026 | 6:03AM CEST

Why Utilities underperformance may continue a little longer. At the very start of Alberto Gandolfi

+39(02)8022-0157 |

the Middle East conflict, Utilities outperformed the broader markets as investors alberto.gandolfi@gs.com

Goldman Sachs Bank Europe SE - Milan

turned to defensive names and renewables (energy security, rising power prices). As branch

expectations around the duration of the conflict rose, the market started to worry Ajay Patel

about rising interest rates and cost of capital; this led to a sector underperformance. +44(20)7552-1168Goldman Sachs International| ajay.patel@gs.com

A potential peace deal could temporarily prolong such an underperformance, as the Mafalda Pombeiro

market is likely to rotate into sectors more positively geared to a re-opening of the +44(20)7552-9425mafalda.pombeiro@gs.com|

Strait of Hormuz, and as a sharp fall in commodities could affect IPPs and Renewable Goldman Sachs International

KhenwarDevelopers. And yet, we think this underperformance is about to come to an end. Dhwani | +1(332)245-7724

dhwani.khenwar@gs.com

Why we think it is nearly a turning point for Utilities. We believe the sector could Goldman Sachs India SPL

Lavizanisoon be “de-risked”, and we would look for entry points into an industry that, in our Lawrence | +44(20)7051-1060

view, is undergoing a profound secular transformation, underpinned by five drivers: lawrence.lavizani@gs.com Goldman Sachs International

(1) power demand growth has turned positive since 2025 and is set to accelerate

further, thanks to rising electrification, especially in retail, where heat pumps and

electric vehicles continue to gain market share; (2) datacenters are coming to