Update shared on 05 Nov 2025
Fair value Increased 0.30%Analysts have increased their price target for SSE from £23.00 to £24.25, citing improved profit margin projections and a sustained growth outlook as key drivers behind the upward revision.
Analyst Commentary
Bullish Takeaways
- Bullish analysts point to the recent upward revision in SSE's price target, attributing it to positive developments in profit margins and improved operational execution.
- There is increased confidence in the company's sustained long-term growth prospects, which supports a higher valuation.
- Growth in SSE's core business segments continues to outperform expectations, further justifying optimism regarding future earnings potential.
- Stable financial performance and strategic management decisions have reinforced the view that SSE remains well positioned to capitalize on market opportunities.
Bearish Takeaways
- Some analysts maintain caution regarding potential execution risks that could impact the realization of margin improvements.
- Concerns persist about sector volatility and external market factors, which could weigh on valuation multiples in the future.
- There is ongoing scrutiny of capital expenditure requirements and their impact on short to medium term cash flows.
What's in the News
- On 27 August 2025, SSE announced that 23,080 shareholders have elected to receive the final dividend for the year ended 31 March 2025 as a Scrip dividend. This results in reduced cash funding requirements for the company (Key Developments).
- The Scrip dividend take-up for the fiscal year was 9.7 percent, which is below the 25 percent cap. This removes the need for any share buy-back to limit dilution (Key Developments).
- As a result of shareholder elections, 1,369,268 new ordinary shares will be issued on 18 September 2025. This represents a modest 0.12 percent increase to the outstanding share capital, excluding treasury shares (Key Developments).
Valuation Changes
- Fair Value per share has increased slightly from £22.33 to £22.40. This change reflects updated analyst assessments.
- Discount Rate remains effectively unchanged at 6.82 percent. This suggests stable expectations for capital costs and risk premiums.
- Revenue Growth projections are steady at approximately 4.56 percent. This indicates consistent expectations for top-line expansion.
- Net Profit Margin has risen marginally from 19.97 percent to 20.04 percent. This supports improved profitability forecasts.
- Future P/E ratio has decreased fractionally from 13.12x to 13.11x. This points to a modest adjustment in valuation multiples.
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