We’ve recently updated our valuation analysis.

SSE Valuation

Is SSE undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SSE?

Other financial metrics that can be useful for relative valuation.

SSE key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.6x
Enterprise Value/EBITDA27.7x
PEG Ratio16.1x

Price to Earnings Ratio vs Peers

How does SSE's PE Ratio compare to its peers?

The above table shows the PE ratio for SSE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average21.8x
JEL Jersey Electricity
19.7xn/aUK£163.9m
NG. National Grid
12.8x3.8%UK£37.5b
SVT Severn Trent
40.9x28.8%UK£7.0b
UU. United Utilities Group
14x32.3%UK£7.2b
SSE SSE
17.9x1.1%UK£18.4b

Price-To-Earnings vs Peers: SSE is good value based on its Price-To-Earnings Ratio (17.9x) compared to the peer average (21.8x).


Price to Earnings Ratio vs Industry

How does SSE's PE Ratio compare vs other companies in the European Electric Utilities Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a17.8%
n/an/an/a

Price-To-Earnings vs Industry: SSE is expensive based on its Price-To-Earnings Ratio (17.9x) compared to the European Electric Utilities industry average (8.8x)


Price to Earnings Ratio vs Fair Ratio

What is SSE's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SSE PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio17.9x
Fair PE Ratio16.6x

Price-To-Earnings vs Fair Ratio: SSE is expensive based on its Price-To-Earnings Ratio (17.9x) compared to the estimated Fair Price-To-Earnings Ratio (16.6x).


Share Price vs Fair Value

What is the Fair Price of SSE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SSE (£17.15) is trading above our estimate of fair value (£13.07)

Significantly Below Fair Value: SSE is trading above our estimate of fair value.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst SSE forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£17.15
UK£20.20
+17.8%
6.9%UK£22.00UK£17.38n/a18
Jan ’24UK£17.12
UK£19.94
+16.5%
10.1%UK£24.00UK£16.50n/a18
Dec ’23UK£17.40
UK£19.69
+13.2%
10.7%UK£24.00UK£16.50n/a18
Nov ’23UK£15.71
UK£19.37
+23.3%
11.3%UK£24.00UK£14.86n/a19
Oct ’23UK£15.28
UK£19.81
+29.7%
9.7%UK£24.00UK£15.70n/a19
Sep ’23UK£16.65
UK£19.39
+16.5%
10.7%UK£24.00UK£15.70n/a19
Aug ’23UK£17.84
UK£19.28
+8.1%
9.7%UK£22.00UK£15.70n/a19
Jul ’23UK£16.78
UK£19.24
+14.7%
10.5%UK£22.16UK£15.70n/a18
Jun ’23UK£17.61
UK£19.10
+8.5%
10.0%UK£22.16UK£15.70n/a18
May ’23UK£18.69
UK£18.67
-0.08%
8.9%UK£22.00UK£15.70n/a19
Apr ’23UK£17.33
UK£18.28
+5.5%
6.9%UK£20.77UK£15.70n/a19
Mar ’23UK£16.34
UK£18.00
+10.2%
7.7%UK£20.77UK£15.54n/a18
Feb ’23UK£15.89
UK£17.69
+11.4%
9.2%UK£20.77UK£13.62UK£17.1519
Jan ’23UK£16.49
UK£17.74
+7.6%
9.4%UK£21.10UK£13.62UK£17.1218
Dec ’22UK£15.83
UK£17.58
+11.1%
9.8%UK£21.10UK£13.62UK£17.4018
Nov ’22UK£16.75
UK£17.59
+5.0%
8.6%UK£21.10UK£15.08UK£15.7119
Oct ’22UK£15.84
UK£17.16
+8.3%
9.8%UK£21.10UK£13.00UK£15.2819
Sep ’22UK£16.53
UK£16.75
+1.4%
9.9%UK£19.00UK£13.00UK£16.6519
Aug ’22UK£14.46
UK£16.64
+15.1%
9.4%UK£19.00UK£13.00UK£17.8420
Jul ’22UK£15.11
UK£16.61
+10.0%
9.6%UK£19.00UK£13.00UK£16.7820
Jun ’22UK£15.64
UK£16.35
+4.5%
10.0%UK£19.00UK£13.00UK£17.6119
May ’22UK£14.68
UK£16.08
+9.5%
11.3%UK£19.00UK£11.95UK£18.6920
Apr ’22UK£14.57
UK£16.12
+10.6%
11.5%UK£19.00UK£11.95UK£17.3320
Mar ’22UK£13.45
UK£16.25
+20.8%
11.5%UK£19.00UK£11.95UK£16.3420
Feb ’22UK£15.12
UK£16.25
+7.5%
11.5%UK£19.00UK£11.95UK£15.8920

Analyst Forecast: Target price is less than 20% higher than the current share price.


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