SSE PLC: Capital delivery on-track

研报英文原文证据摘录

SSE PLC: Capital delivery on-track

Forecast returns

Forecast price appreciation -4.8%

Forecast dividend yield 2.9%

Forecast stock return -1.9%

Market return assumption 9.2%

Forecast excess return -11.1%

Company Description

SSE's core businesses are regulated UK energy networks and renewable generation, with the

remainder being made up of flexible thermal generation capacity, energy supply in GB/Ireland

and related energy services. SSE operates transmission and distribution network assets with

c£11.1bn RAB (FY24, year-end March) and is one of the UK's largest renewable generators,

with aspirations to triple renewable output over 2023-27.

Valuation Method and Risk Statement

Our valuation is based on a sum of the parts approach cross checked with peer multiples and

divisional DCFs. SSE is exposed to a wide range of risks including regulatory, political,

operational and macroeconomic factors, especially commodity and power prices, interest

rates, tax rates, regulatory decisions and other corporate related activity. Any change in these

drivers would impact valuations, earnings and our views. In addition SSE may be exposed to

risks related to Nationalisation in the UK, and Scotland and Scottish independence. For a fuller

discussion of risks, please see the relevant section of this report.

National Grid runs regulated energy delivery networks in both the US and the UK. The UK is

electricity transmission and distribution. The US is electricity and gas distribution, and

electricity transmission. A key risk is from the actions of regulators in either country, which can

impact prices, returns and valuations. National Grid is responsible for delivering essential

energy services, so is at risk from operational failings, which can have a financial or

reputational impact.