Jefferies Names Top Picks in EU Utilities as Power Prices Surge

Jefferies has turned bullish on European utilities coming out of the summer break, naming three top picks positioned to benefit from rising power prices and accelerating regulated capex growth. 

The broker argues the market still underestimates the sector’s medium-term earnings outlook, even as valuations remain attractive following recent share price corrections. Its top ideas, spanning regulated, power, and integrated utility exposure, are seen delivering strong performance through year-end and into 2027.

E.ON is Jefferies’ top regulated-utilities pick. Following a recent share price correction, the broker sees an attractive entry point, with E.ON’s first-half performance implying near-term upside to consensus.

The key catalyst ahead is the October publication of Germany’s Network Development Plans (NAP 2026), which Jefferies believes will support a meaningful upgrade to E.ON’s German grid capex, in turn driving faster regulated asset base (RAB) and earnings growth.

RWE is Jefferies’ preferred power play, and one of the sector’s most compelling growth stories, with a projected double-digit EPS CAGR stretching into the early 2030s.

The broker’s bullish stance rests on continued strength in European power prices, driven by elevated gas prices, tighter storage levels, and improving demand, a dynamic it expects to remain a key driver of utility earnings over the coming years.

EDP is Jefferies’ top pick among integrated utilities. The broker views EDP as one of the most power price-sensitive names in the sector, combining strong exposure to rising power prices with accelerating network growth, all at what it considers an attractive valuation.

This dual exposure, to both power markets and regulated network expansion, underpins Jefferies’ conviction in the name heading into 2027.