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RBC Capital downgrades SSE to ‘perform’ from ‘outperform’

The analysts said its earnings per share (EPS) estimates have been cut by approximately 10%-15% across its forecast horizon and show no long-term growth

SSE
In morning trading, SSE’s shares fell 0.15% to 1,347.50p

SSE plc (LON:SSE) shares fell on Wednesday morning as RBC Capital downgraded its rating to ‘perform’ from ‘outperform’ and cut its price target to 1,350p from 1,550p.

In a note to clients, the Canadian broker’s analysts said they believe that the recent CMD was disappointing both in terms of near-term earnings drivers and the new base dividends in the RemainCo of 80p per share in the financial year 2020.

READ: Utilities under pressure: SSE and Thames Water pay the penalty after regulatory investigations

The analysts said its earnings per share (EPS) estimates have been cut by approximately 10%-15% across its forecast horizon and show no long-term growth.   

“Even though we are supportive of the retail spin-off strategy and believe the RemainCo could become an attractive M&A target we no longer see the valuation upside to warrant an outperform recommendation,” the analysts at RBC Capitals said.

In morning trading, SSE’s shares fell 0.15% to 1,347.50p.

Quick facts: SSE PLC

Price: 1290 GBX

LSE:SSE
Market: LSE
Market Cap: £13.36 billion
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