Morgan Stanley said that the power industry is undergoing a transformation, and many power producers, grid operators and utility companies will benefit from it. Analysts at the investment bank outlined in a report on October 23: “Since 2023, global electricity demand is booming and prices are constantly changing. The cost of producing clean electricity has fallen by a third, especially in Asia. “They Adding: “Global power markets are surprising on multiple fronts, and investors are exploring a new normal across the power value chain.” The analysts noted that although global power demand has risen, investors “have not yet agreed that this is the new normal. ” and therefore has not yet been incorporated into investment decisions. Morgan Stanley said it was also looking at renewable energy, which it called “interesting” but “riskier than before in several regions due to competition from consumers and grid constraints”. Morgan Stanley analysts named three overweight global power industry stocks that they believe have potential upside of more than 40%. RWE RWE: Morgan Stanley noted that the German power giant, which produces and trades electricity, faces “tight power markets that reward flexibility and value creation from renewable energy sources in Europe and the United States.” RWE is listed on the Frankfurt Stock Exchange and trades in the United States as American Depositary Receipts (ADRs) under the symbol RWEOY. The investment bank set a price target of 50 euros ($54) on the stock, with upside potential of about 60%. AES Corp. AES Corp.: Morgan Stanley highlighted the company’s “expanding of its renewable energy portfolio” as a theme worth watching. The U.S.-based energy company is engaged in utilities and power generation businesses. The investment bank set a price target on the stock at $25, representing an upside potential of approximately 46.4%. Tenaga Nasional: This Malaysian state-owned utility is on Morgan Stanley’s radar for its “single grid operator benefit from power demand + renewable energy grid capex.” Tenaga is listed on Bursa Malaysia and trades as American Depositary Receipts in the United States. Tenaga shares are also included in the iShares MSCI Malaysia ETF (weight 6.7%) and the Global X FTSE Southeast Asia ETF (weight 2.3%), Morgan Stanley The Malaysian stock’s target price of 20.60 against the ringgit ($4.74) gives it an upside potential of nearly 46.5%. —CNBC’s Michael Bloom contributed to this report.
