European utilities gained investor attention on Wednesday as power prices climbed, prompting Jefferies to name its top picks across the sector. The brokerage upgraded E.ON, RWE and EDP, citing structural tailwinds from rising electricity prices and accelerating regulated capital expenditure.
Jefferies designated E.ON as its top regulated-utilities pick, noting that first-half results suggest near-term upside to consensus following a recent correction in the stock. The firm also highlighted Germany’s upcoming Network Development Plans (NAP 2026), slated for publication in October, as a potential catalyst. The update is expected to support an upgrade to E.ON’s German grid capex, which could accelerate growth in its regulated asset base and earnings.
RWE was identified as Jefferies’ preferred power-focused name, framed as one of the sector’s growth stories. The brokerage projected a double-digit compound annual growth rate for earnings per share through the early 2030s, driven by expansion in renewable and conventional power generation.
EDP was selected as Jefferies’ top integrated utility pick, with analysts emphasizing its sensitivity to power prices alongside accelerating network growth. The company’s exposure to both regulated and competitive segments positions it to benefit from higher electricity prices and increased investment in grid infrastructure.
The upgrades follow a period of elevated European power prices, supported by tighter gas storage levels, rising demand and sustained gas price strength. Jefferies’ recommendations reflect a broader view that regulated utilities and power-focused operators are well-positioned to capitalize on structural shifts in the region’s energy landscape.
