SSE share price up despite downbeat analyst comments

on Feb 15, 2016
Updated: Oct 21, 2019

SSE’s (LON:SSE) share price has risen today, unaffected by a couple of negative analyst comments. Credit Suisse has lowered its target price on the blue-chip company from 1,500p to 1,450p, explaining that lower energy prices would rob SSE of any growth in terms of earnings per share and earnings before interest and taxes during the period running from 2013 to 2018. As a result, the energy utility group would need to cut long-term capital expenditures from £1.65 billion per year to £1.4 billion or unveil another £1 billion disposal plan, according to the broker.

Separately, Moody’s has reaffirmed its negative outlook for SSE. The ratings agency said in a note to clients today that it had reiterated the A3 issuer rating of SSE, and the Baa2 rating of its hybrid notes. Concurrently, Moody’s has affirmed SSE’s P-2 short-term rating and the A3 issuer ratings of subsidiaries SSE Energy Supply Ltd, SSE Generation Ltd, Scottish Hydro Electric Power Distribution, Scottish Hydro Electric Transmission and Southern Electric Power Distribution.

“The assigned rating reflects SSE’s well-balanced, vertically integrated business profile, which includes a strong and growing contribution from regulated networks,” Moody’s said.
The negative outlook reflected “continuing downward pressure on commodity prices, the increasingly competitive market for retail energy supply”, and the uncertain impact of the Competition and Markets Authority’s (CMA) investigation of the energy market, which is expected to result in provisional remedies in March 2016, Moody’s revealed.
Despite the negative comments, SSE’s share price has risen today. As of 14:45 GMT, the stock was trading 1.71 percent higher at 1,369.00p, slightly underperforming the FTSE 100 index, which meanwhile stood 2.01 percent up at 5,821.99 points.
As of 15:03 GMT, Monday, 15 February, SSE PLC share price is 1,369.50p.