BofA Sees Major Earnings Upgrades for Top European Utility Stocks

Several of Europe's leading utility stocks are poised for significant earnings upgrades ahead of the November reporting season, according to analysts at Bank of America. In a recent client note, the bank highlighted multiple companies with the potential for at least 6-9% upside to their 2027 estimated earnings per share (EPS) compared to current consensus.

Top Picks Identified

Bank of America's analysis pinpoints four major utilities that stand out for their earnings potential and favorable operating conditions. The companies are expected to deliver strong earnings revisions heading into the next reporting period.

• EDP (Energias de Portugal): The Portuguese utility was named BofA's top pick in the sector. The bank noted that EDP recently surpassed analyst expectations for its first-half 2026 earnings and raised its full-year outlook, driven by strong network performance and better visibility in renewables.
• Endesa: The major Spanish utility was also identified as having substantial upside potential for meaningful EPS upgrades.

Favorable Regulatory and Inflationary Tailwinds

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Beyond the Iberian peninsula, BofA highlighted UK and German utilities for their resilient positioning in the current macroeconomic environment.

SSE and RWE

Both UK-based SSE and Germany's RWE are expected to see significant 2027 estimated EPS upgrade potential of 7-8% above consensus, according to the bank. Their strength is attributed to operating in markets with a lower risk of additional policy interventions like price caps.

The note points out that the UK has already adjusted its windfall tax, raising the clawback from 45% to 55% in July, which reduces future regulatory uncertainty. Furthermore, both companies benefit from Consumer Price Index (CPI) indexation across a large portion of their assets, providing a mechanical hedge against the inflationary effects of higher energy prices.