Broker snap: SSE 'up with events', Investec downgrades

16th Apr 2013 09:23

Investec has lowered its recommendation for utilities giant SSE from 'buy' to 'hold' following the stock's recent strong performance that has taken it beyond the target price of 1,520p.Nevertheless, the broker said its positive view about the business remains intact."The investment case for SSE remains rooted in its continuing drive for efficiency in terms of assets in the ground, and disciplined capital deployment for growth. "SSE's clear geographical focus (UK/Ireland), and strong position in renewables, fit well with our overall sector thesis," said analyst Harold Hutchinson.A number of events has boosted the share price over the past few months: the acquisition of a 50% stake in the Sean Gas field from BP; the successful Greencoat stock market debut and subsequent sale of four wind farms; and an Ofgem fine on selling methods that should end uncertainty.Despite Tuesday's downgrade, Hutchinson said: "The company's medium-term strategic priority of above-inflation dividend increases provides good downside protection in our view."The share price had slipped early on but was trading 0.26% higher at 1,531p by 10:03.BC