EDF FP – Reiterate BUY – Atomic opportunity remains, +25% upside remains
*We are up +18% since we intitiated the trade and remain long
*News overnight highlights that catalyst underway although little details at this point
*Issue for a breakup scenario has been a lack of agreement between the EU and France – this seems to be underway now
*We see large potential to unlock value in case of a split with the government keeping the Nuclear assets and splitting off the renewables
*EDF cheapest ESG play in Europe if ignoring the Nuclear assets – this will cause large repricing post a potential split – as an example EDF trades on a 2 year forward EV/EBITDA multiple of 5.2x while SGRE SM, VWS DC, ORSTED DC all trade around 22x
*We have a price target of EUR 14
EDF – Buy – Nuclear Reform Key for Future
Friday • 02 October 2020 • 10:34
*Interesting talk about potential reform on the Nuclear front on EDF FP – we see large value
*We see large potential to unlock value in case of a split with the government keeping the Nuclear assets and splitting off the renewables
*EDF trading very cheap compared to the rest of the ESG / Renewable sector in Europe
*Acquisition in Ireland yesterday also highlights the push to renewables {NSN QHJ2I7MB2SJP <GO>}
*Also stands to benefit from Hydrogen trend – GS says Hydrogen demand over next 25 years could imply need of 1.2tln of investment in the sector
*We have a price target of EUR 14 with a split as a possible catalyst
EDF Climbs on Investor Optmism Over Nuclear Regulation Reform {NSN QHKCP7T1UM12 <GO>}