SSE Earnings: Keeps Guidance Despite Poor Wind, Hydro Conditions; Lifting Fair Value 9% to GBX 2,200

No-moat SSE released a trading statement for the first quarter of its 2024 fiscal year. It maintained its annual EPS guidance despite poor wind and hydro conditions. We raise our fair value estimate to GBX 2,200 from GBX 2,020 on the back of a rise in our adjusted EPS by around 30% through fiscal 2028 due to the material guidance upgrade of last May. The relative positive valuation impact is mitigated by the inflation-driven increase in investments of the updated business plan. The current share price implies a fiscal 2024 P/E of 11.7, reflecting the undervaluation of the shares.