Jefferies downgrades Iberdrola, favours SSE and Engie among integrated utilities

Looking into 2026 for Europe's integrated utilities, Jefferies favours exposure to regulated grids with potential for positive surprises through regulation, strong balance sheets and robust non-regulated businesses

The brokerage cuts Iberdrola IBE.MC to "hold" from "buy", saying the Spanish group's growth outlook is priced in after the stock's around 35% gains this year

"Iberdrola's high-single-digit EPS growth outlook is attractive but appears well-understood," Jefferies says, adding the driver for a next growth outlook upgrade is less clear

Jefferies elects "buy"-rated SSE SSE.L as one of the sector top picks, saying several positives from UK regulation are yet to be priced in

Also with a "buy" rating, France's Engie ENGIE.PA is another top pick, as Jefferies says markets underestimate its growth outlook