SSE Sharply Increases Its Fiscal 2023 Earnings Guidance; Shares Undervalued

We don't expect to materially change our GBX 1,980 fair value estimate after no-moat SSE sharply raised its fiscal 2023 earnings guidance in its third-quarter trading statement. SSE has a strong renewables footprint supplemented by combined cycle gas turbines and transmission and distribution networks indexed to inflation and with significant growth opportunities in the wake of the energy transition. The group is almost fully exposed to the U.K. where political risk has stabilized. All in all, this attractive positioning is not fully priced in.