Analysts at Jefferies International have downgraded their rating for SSE PLC (LSE:SSE) to 'hold' from 'buy' on valuation grounds, with their target price for the utilities group cut by 12% to 1,830p.
In a note to clients, the Jefferies analysts pointed out that SSE outperformed the European utility sector by around 15% over 2022 thanks to power/gas prices-driven EPS upgrades, deleveraging and clarity on UK windfall tax for electricity generators.
"However," they noted, "these positive factors now appear to be well-reflected within consensus, with sources of further earnings upgrades less clear to us."
The analysts concluded: "We see some valuation upside on the stock, but it's not big enough to retain a Buy."
In morning trade on Tuesday, SSE shares were changing hands at 1,714.50p.