BUY SSE LN – Update, +1% ABS – Speculation about Elliott stake build further backs thesis, great opportunity to add

Upside remains +30% in the short/medium term, our peer valuation comes in around 2000p

We continue to see SSE as a heavily discounted renewables pick which are rare to come by these days

We see this speculation as a great opportunity to add or start a position as now there could be a firm catalyst on the horizon and the downside remains very limited – since we initiated the trade the stock is unch and had very little volatility over the last two months

Elliott could be just what the company needs in order to get more focus from the analyst community and get out of its current value trap

Recently we have seen a trend of companies looking to divest some of its renewable business – The largest ones recently being Siemens and Repsol – this could also add another angle as a potential catalyst – and perhaps one that an activist like Elliott could help push for

ANR still shows 11 Buys, 7 Holds and 1 Sell

SSE LN – Great way to play ESG, +25% upside on the short/medium term

Thursday • 03 June 2021 • 16:14

*Top renewable pick, still heavily discounted compared to the peers

*Remains on track with investment program which will make them a top renewable player in Europe with considerable potential for future growth above and beyond

*The company also expects to triple its renewable capacity by 2030 in a period where we recently saw the ruling that RDS has to cut CO2 emissions by 45% by 2030 – this leaves significant upside for SSE on its renewables assets both from a valuation perspective but as a target themselves in case they split the businesses

*Capex plan of GBP 7.5bn on track to 2025 with much of it already contracted – main focus of program is SSE Renewables projects

*The company is also doing a disposal program where it is getting rid of its contracting and rail business this month and its Gas production by the end of the year and also looking to sell its stake in SGN mid-summer with completion set for year-end which should result in them exceeding the GBP 2bn cash processed from asset disposals (compared to its GBP 15bn market cap) and thereby provide another medium term catalyst

*Recently we have seen a trend of companies looking to divest some of its renewable business – The largest ones recently being Siemens and Repsol – this could also add another angle as a potential catalyst

*ANR shows 11 Buys, 7 Holds and 1 Sell

*Our peer valuation shows a 30% upside for SSE with a price target of 2000p