Fundamental, Research

European Utilities: Navigating Through High Interest Rates

Lee Zhao Jun, Equity Analyst
14 March 2024

Summary

We anticipate that European utilities' value will decline due to a high interest rate environment and a decrease in earnings growth. However, if there are faster or more significant rate cuts in 2024 than expected, this trend could be reversed. Despite these challenges, we remain selective in investing in high-quality European utilities companies that we believe will generate healthy cash flows and attractive returns for shareholders through dividends and buybacks.


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