SSE PLC

SSE PLC (LON: SSE) is a FTSE 100 index listed entity that manages electricity networks and renewables.

The shared will go ex-dividend on 28 July 2022.

Investment Rationale for Valuation – WATCH at GBX 1,786.00

• Windfall Tax: The chief executive of the SSE stated that windfall tax could hamper growth of building windfarms, and the Company will have to pledge GBP 24 billion in this decade on low carbon projects.
• Resilient Business: During FY22, SSE reported a growth in operating profit and earnings per share against FY21; however, it also highlighted the uncertainties associated with the volatile macroeconomic conditions.
• Macroeconomic Risk: The equity markets are likely to remain jittery over Covid-19 curbs in China, rising interest rates, the strongest U.S. dollar in two decades, concerns over inflation and possible recession.
• Technical Indicator: The MACD line has given a bearish crossover against the signal line, and it has gone below the centreline as well.

One Year Share Price Chart

 (Source: REFINITIV; Analysis done by Kalkine Group)

Conclusion

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Based on the overstretched prices, impact of windfall tax, and uncertain macro conditions, we have given a “WATCH” recommendation on SSE PLC at the closing market price of GBX 1,786.00 (as of 1 June 2022, at 11:30 AM GMT+1).

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings.

Note 3: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’ 

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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