Demand
for
power
and
data
centers
has
been
surging,
and
several
companies
in
Europe
are
set
to
benefit,
according
to
Goldman
Sachs.
Europe’s
power
demand
is
expected
to
rise
by
as
much
as
50%
in
the
next
10
years,
reversing
the
slump
it
has
been
facing
since
2008,
the
investment
bank’s
analysts
wrote
in
an
April
29
research
note.
They
project
that
800
billion
euros
($857.5
billion)
will
be
spent
on
Europe’s
power
transmission
and
distribution,
thanks
in
part
to
“years
of
under-investment.”
“In
an
industry
with
elevated
operational
and
financial
gearing,
such
an
inflection
in
revenues
(which
is
also
likely
to
trigger
secular
organic
growth
in
power
grids
and
renewables)
should
have
a
significant
effect
on
corporate
profits,”
the
analysts
said.
Here
are
three
of
Goldman’s
buy-rated
stocks
with
over
30%
upside
potential
in
the
next
12
months.
E.on
Goldman
is
bullish
on
electric
utility
company
E.on
and
just
raised
its
target
price
by
nearly
3%
to
17
euros.
That
gives
the
German
stock
—
which
is
on
Goldman’s
conviction
list
—
about
35%
potential
upside.
Reasons
for
the
bank’s
buy
rating
on
the
stock
include
Germany’s
electrification
push
and
retail
margins
that
it
says
are
“likely
to
be
well
supported”
by
falling
energy
prices.
Goldman
expects
E.on
to
deliver
“middle-single-digit
[earnings
per
share
compound
annual
growth
rate]
over
2023-28E.”
SSE
Scottish
energy
giant
SSE
is
on
Goldman’s
radar
following
its
recent
update
confirming
“its
story
of
renewed
growth.”
“The
company
now
details
a
£20.5
billion
[$25.67
billion]
capex
plan
over
FY23-27
(run-rate
up
c.60%
versus
the
November
2021
plan),
driven
by
higher
investment
in
renewables
and
networks,”
the
bank’s
analysts
wrote.
“High
power
prices
and
thermal
generation
profits
have
added
to
the
cashflow
the
company
has
to
invest,”
they
said,
adding
that
the
company’s
growth
will
pick
up
as
its
pipeline
is
built.
Goldman
has
a
target
price
of
2,024
British
pence
on
the
stock,
giving
it
around
42.8%
upside
potential.
Elia
Also
on
Goldman’s
list
is
Belgian
transmission
systems
operator
Elia
.
The
company
stands
out
thanks
to
its
“strong
earnings
growth
potential
as
the
fastest
growing
EU
utility
facility
in
our
coverage,”
the
investment
bank’s
analysts
wrote.
Goldman
has
a
target
price
of
135
euros
on
the
stock,
giving
it
45.5%
upside
potential.
—
CNBC’s
Michael
Bloom
contributed
to
this
report.
