Jefferies has upgraded its view on European utilities, citing sustained high energy prices and accelerating regulated capital expenditure as key tailwinds for the sector. The bank’s bullish stance follows the summer market pause, with valuations appearing attractive after recent corrections despite underestimated medium-term earnings potential.
Among regulated utilities, E.ON was designated the top choice, with analysts citing potential near-term upside relative to consensus. The firm highlighted E.ON’s first-half performance as a foundation, while flagging Germany’s upcoming Grid Development Plans (NAP 2026), scheduled for release in October, as a key catalyst. The plan is expected to drive growth in German grid capex, regulated asset base expansion and earnings.
RWE was selected as the preferred energy-focused utility, described as one of the sector’s most compelling growth narratives. The bank pointed to Europe’s elevated energy prices—supported by high gas costs, tighter storage levels and improving demand—as a structural support for RWE’s earnings trajectory. The company is projected to deliver double-digit compound annual growth in earnings per share (EPS) into the early 2030s.
Energias de Portugal (EDP) was named the leading integrated utility pick, noted for its dual exposure to energy markets and regulated grid expansion. EDP’s stock was cited as among the most sensitive to energy price movements within the sector, with a closing price of €4.678 on August 31, down 0.43% day-over-day. The bank’s positive outlook spans through year-end and into 2027, aligning with broader expectations for sustained energy price strength and regulatory support.
