Business
Favour exposure to cables in energy transition - Barclays
Favour exposure to cables in energy transition - Barclays
About this update from Prysmian S.p.a.
FAVOUR EXPOSURE TO CABLES IN ENERGY TRANSITION - BARCLAYSThe recent blackout in Spain and Portugal has put the energy transition and electricity grid resilience under scrutiny and this will likely support grid capex, according to Barclays. Some have argued that Spain's use of renewable energy as an increasing part of its electricity generation made the blackout more severe. The Spanish government said establishing the cause of the outage will take time and there will be no simple answers. "The recent Iberian blackouts likely underpin both positive investor sentiment towards, and continued strength in, demand for grid infrastructure/energy transition-related industrial products and systems," Barclays analysts write. They say that cable manufacturers offer the best exposure to this theme, highlighting Italy's Prysmian MIL:PRY and Denmark's NKT OMXCOP:NKT."The recent blackouts serve to increase our confidence that grid infrastructure capex spend is set to increase, thus warranting higher multiples and earnings estimates," they add. In contrast, Barclays reiterates an underweight rating on wind energy generation firm Vestas OMXCOP:VWS and concerns on equal-weight rated Nordex XETR:NDX1. "Our analysis indicates that Euro wind OEMs (original equipment manufacturers) could be facing declining volumes in their new equipment businesses as utilities capex shifts away from renewables to grid/networks," Barclays adds. (Samuel Indyk)***** TUESDAY'S OTHER LIVE MARKETS POSTS: STOXX 600 CONTINUES HIGHER AFTER EU TARIFF PAUSE CLICK HERE EUROPE BEFORE THE BELL: FUTURES FLAT, FTSE PLAYS CATCH UP CLICK HERECHAOTIC US TRADE SHIFTS LEAVE MARKETS WARY CLICK HERE