Investing.com — narrowed its full-year adjusted earnings per share guidance to 147-152 pence on Thursday, shifting toward the top of its prior 144-152 pence range, as the British energy company reported a 60% year-on-year surge in network capital investment.
The update, issued ahead of full-year results due May 28, confirmed capital investment of around £3.5 billion for the year ended March 31, with adjusted net debt and hybrid capital expected to land just over £10 billion.
SSE said five of its 11 major electricity transmission projects are now under construction, with 26 of the 34 required major consents received.
Renewable generation output rose approximately 10% year-on-year to around 14.5 terawatt-hours, which the company attributed to increased capacity from its construction programme, partially offset by mixed weather conditions during the year.
The company said all other forward guidance previously provided remains unchanged.
Morgan Stanley raised its price target on the stock to 2,950 pence from 2,700 pence and maintained its “overweight” rating. The analysts estimated full-year EPS at 149 pence, against a consensus of 148 pence.
The brokerage estimated end-year net debt at £10.2 billion, above the £9.5 billion consensus figure.
It forecast FY2027 EPS of 182 pence, against a consensus of 182.5 pence, and maintained its longer-dated EPS projections of 232 pence for FY2029 and 242 pence for FY2030, in line with SSE’s own guidance range of 225-250 pence for FY2030.
Morgan Stanley said SSE’s FY2027 EPS company guidance range of 161-184 pence remained unchanged.
The analysts valued SSE at 13 times its 2027 calendar-year price-to-earnings ratio and said its 2,950 pence price target implies a re-rating to 17 times, comparable to Elia, which it said trades at 18 times. Its bull case stands at 3,400 pence and bear case at 2,100 pence.
SSE shares closed at 2,676 pence on April 1, within a 52-week range of 1,468 pence to 2,763 pence, giving the company a market capitalisation of £28.8 billion.
SSEN Transmission last month accepted Ofgem’s RIIO-T3 Final Determination. The company said it continues to monitor developments in the Middle East but said there has been no material impact on group performance.