Bernstein cuts Italy's Enel to 'market-perform', says capital allocation lacks visibility

Bernstein cuts Enel ENEI.MI to "market-perform" from "outperform", noting "lack" of visibility over its capital allocation policy due to its "inorganic" expansion, and risks to domestic supply activities

Italy's biggest utility has nearly 20GW of brownfield projects under review across Europe, North America and Australia that pose long-term value creation questions, it says

Enel also faces domestic headwinds from decreasing power and gas prices, competition and affordability issues, it notes

Regulatory uncertainty in Brazil, Italy and Spain might hamper network earnings, and delays in concession renewals could "derail" Enel's capital expenditure plans, it adds

"Enel's significant YTD share price gains (~+28%) have been driven primarily by multiple expansion rather than earnings growth" - Bernstein

Raises PT marginally to 8.9 euros ($10.37) from 8.5 euros, on a "very limited" upside

Out of 26 analysts that cover Enel, 15 rate the stock "strong buy" or "buy,"​ nine rate "hold" and two​ rate "strong sell" or "sell" - data compiled by LSEG

($1 = 0.8584 euros)