RBC Capital upgrades SSE on windfall tax clarity

RBC Capital Markets upgraded SSE on Tuesday to ‘outperform’ from ‘sector perform’ and lifted the price target to 2,050p from 1,825p as it pointed to clarity over windfall taxes.

"SSE, like much of the UK utility space, has been buffeted by macroeconomic concerns and risks around government intervention for much of 2022," it said.

"We now have clarity on windfall taxes, and think investors should now refocus on SSE’s attractive business mix and long-term growth prospects aligned to the energy transition."

RBC said the net impact of higher power prices and inflation, alongside windfall taxes result in its earnings per share forecasts going up around 15-30% over the next three years.

At 1030 GMT, the shares were up 2.1% at 1,730.50p.