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(Sharecast News) - Citi downgraded SSE on Friday to 'sell' from 'neutral' and cut the price target to 1,997p.
"SSE's equity issue has removed near-term overhang, and 2029/30 EPS target (225-250p) and five year capital allocation have provided improved visibility," the bank said.
"At the same time, SSE shares have re-rated close to 40% over the last two months and up 17% yesterday alone."
Citi said it sees such a share price move as excessive and that it does not reflect the fundamentals, especially given what's likely to be a limited upward revision to consensus earnings and the fact the shares are now implying a 65% premium to FY27 RAB or renewable/thermal EV/EBITDA of circa 10x or sub-3% dividend yield.
"While we understand the relative appeal of SSE shares on headline multiples versus a fully-valued sector, our rating and price target are absolute, which leave us with limited upside."
Elsewhere, Berenberg cut its price target on QinetiQ to 550p from 570p as it trimmed estimates after the company's first-half results.
The bank, which kept its 'buy' rating on the shares, said QinetiQ delivered a "resilient" set of H1 results despite sluggish market conditions.
"The outlook for H2 is well underpinned by the orderbook, limiting downside risk from a more prolonged slow order intake environment," it said.
"Publication of the UK Defence Investment Plan is scheduled before the end of the year; this will act as a catalyst to drive an uptick in UK defence contract flow, in our view."
Berenberg said it was lowering its revenue and underlying operating profit estimates by 1% over FY26-28, due to lower estimates in both divisions.
"The impact on EPS is cushioned by a lower tax rate in FY26 and higher accretion from the share buyback," it said.
"We lower our free cash flow estimates in FY26/27 by 15%/6% respectively, driven by restructuring costs and higher-than-expected digital investment to FY28.
"Management guided to 22m of digital investment in FY26, a lower level in FY27 and in the final year of investment in FY28."