GS Utilities Daily: European Utilities: Our thoughts into Q2 results // EU countries not utilizing building and transport decarbonisation fund

Research evidence excerpt

GS Utilities Daily: European Utilities: Our thoughts into Q2 results // EU countries not utilizing building and transport decarbonisation fund

Goldman Sachs GS Utilities Daily

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European Utilities: Our thoughts into Q2 results

As the Q2 earnings releases approach, we highlight what we expect to be the key

takeaways from this results season. We believe Q2 is likely to be a positive driver for the

sector as a whole. In particular, we see this as a positive for: Naturgy, RWE, and Enel (all

Buy-rated), for which we see a dislocation between recent share price performance and

the earnings outlook. For Naturgy and Enel, we anticipate guidance upgrades, or a

narrowing (to the upside) of existing guidance. We also expect a solid quarter (and a

modest guidance upgrade) for EDP (Neutral), although we flag that investors with whom

we have spoken already appear positioned for it. Lastly, we expect strong profits from

Iberdrola (Neutral), which could also imply a mild guidance upgrade; however, its recent

strong share price performance, and its premium valuation multiples could lead to some

profit taking into, or immediately after, the results. More here.

EU countries not utilizing EIB building and transport decarbonisation fund

Since the inception of the European Investment Bank’s €3 bn fund to decarbonise