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Investing.com - UBS downgraded BKW AG (BKW:SW) from Buy to Neutral while reducing its price target to CHF185.00 from CHF190.00, citing limited upside potential following the stock’s strong performance.
The Swiss utility company’s shares have experienced a significant run-up, prompting UBS to reassess its outlook on the stock’s future growth prospects.
UBS anticipates downside risk to consensus estimates for fiscal years 2025-2027, pointing to muted hydroelectricity production year-to-date as a key factor in its revised assessment.
The investment bank also factored in expectations of subdued electricity price evolution, with particular concern about the LNG market facing potential surplus after 2027, which could impact BKW’s Energy Solutions division that accounts for approximately 67% of the company’s projected FY25 EBIT.
BKW’s current valuation stands one standard deviation above its historical average EV/EBITDA ratio, trading roughly in line with integrated utility peers, further supporting UBS’s more cautious stance on the stock.
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