Utilities Daily: Elia Downgrade and Veolia Q1 Update

Goldman Sachs downgrades Elia to Neutral on valuation while maintaining Buy ratings for Veolia and Engie following Q1 results. The report highlights a utility 'super-cycle' driven by AI data center electrification and grid modernization.

Key Takeaways

• 1.Elia is downgraded from Buy to Neutral as near-term growth and double-digit EPS CAGR through 2028 appear fully priced into the current stock valuation.
• 2.European Utilities are entering a 'Super-Cycle' driven by data center demand (AI), electrification, and aging grid infrastructure, with investment needs projected to increase 60-100% over the next decade.
• 3.Veolia and Engie estimates were updated post-Q1 results, with both remaining Buy-rated due to valuation discounts and growth from infrastructure/renewables investment.

Table of Contents

• Utilities and Clean Energy Conference
• Elia: Structurally compelling, but near-term upside looks priced in; down to Neutral
• Veolia Environnement: Updating estimates post Q1 2026 results
• Engie: Update estimates post Q1 2026 results
• EU said to stop backing projects with inverters from "high-risk" countries
• Other news
• Events to watch this week
• Research you need to read
• Disclosure Appendix

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