European Utilities to Gain from Higher Natural Gas Prices

Dow Jones
09/22

1053 GMT - European utilities' earnings will benefit from higher-for-longer natural gas prices on the continent, Bank of America analysts write. Continuing disruption in Qatar, increased demand in Asia and low storage levels in Europe will combine to keep benchmark European natural gas prices at 55 euros a megawatt hour in 2027, the analysts say. Markets are underestimating the impact on utilities' companies EPS by around 6%-9%, the analysts say. European governments could impose lower power price caps, but levels will likely be above prices set in the 2022 energy crisis, the analysts say. SSE and RWE are both likely to deliver strong results in November, they say. A basket of European utilities stocks rise by 0.1%.

 

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