SSE share price: what’s the latest ahead of half-year results?

SSE is clearly committed to embracing renewable energy, evident by its divestment of its retail gas and electricity unit to OVO in September.

However, with the company investing heavily into offshore wind farms, hydro sites and gas, along with its infrastructure network that includes 130,000km worth of lines and cables across the UK, its financial performance is now heavily weather dependent.

Its networks will ensure that investors receive adequate dividends as the company continues to reduce its carbon footprint in response to increasing political and regulatory pressure. But its share price is unlikely to make significant gains in the near-term.

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CMA launches inquiry into OVO deal

The divestment of SSE’s retail unit remains subject to regulatory approval, however, with the UK Competitions and Markets Authority (CMA) launching an investigation into the deal in October.

The CMA is concerned that the £500 million deal will reduce consumers options in the energy supply sector and could lead to customers bills significantly increasing.

‘We have long believed that a dedicated, focused and independent retailer will ultimately best serve customers, employees and other stakeholders – and this is an excellent opportunity to make that happen,’ SSE CEO Alistair Phillips-Davies said.

‘OVO shares our relentless focus on customer service and has a bold vision for how technology can reshape the future of the industry. I’m confident that this is the best outcome for the SSE Energy Services business and customers.’

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Berenberg downgrades SSE ahead of half-year results

Ahead of its half-year results next week, analysts at Berenberg downgraded SEE from a ‘buy’ to a ‘hold’ rating and issued a target price for the stock of £13.50 a share.

UBS and Deutsche Bank were less optimistic about the stock, both issuing a £13 target price for SSE shares in October, with HSBC providing the most upbeat outlook with a £14.80 target for the energy company.

SSE is trading at £12.55 a share as of 11:45 GMT on Thursday. Therefore, analysts believe that the stock has a potential upside of between 3.5% to 17%.