Three weeks after taking an initial reaction to the crisis, the analysts on Friday issued a “more developed assessment” of the potential impact of the virus on sector earnings.
Continental stocks with “cyclicality… power price exposure and… more-risky regulated networks” were kept on ‘sell’ recommendations.
“We maintain a bias towards regulated and high-quality integrated utilities,” they said.
However, National Grid was one of those downgraded to ‘hold’ following a recent increase in the share price, offering little upside to the unchanged 910p target price.
Elsewhere, analysts at Berenberg also put out a note on SSE, saying its “focus on regulated networks and renewables presents a compelling mix during the COVID-19 uncertainty” and “ticks a lot of boxes on the ESG front especially now that it has exited coal".
But the analysts felt the valuation offers “little upside” and it remained at ‘hold’, cutting the price target to 1,300p.