Sharecast News
26 May, 2022 13:02

JP Morgan reiterates positive stance on UK energy

wind farm offshore greencoat uk windfarm

JP Morgan has reiterated its positive stance on the UK energy sector, despite the likely imposition of windfall taxes.

The opposition parties first called for a windfall tax earlier this year, after surging wholesale oil and gas bills boosted corporate profits while household energy bills rocketed.

The government initially argued that a tax would deter investment in green technology and infrastructure, but as the cost of living crisis continues to mount, the Treasury has changed its stance.

In a report reviewing the potential impact, JP Morgan said: "The debate over a potential windfall tax on the UK energy sector has built in recent weeks, with political rhetoric appearing to move in favour of some form of levy.

"Windfall taxation has been rare in the UK but these are arguably exceptional times.

"At the upper end of a 10-50% ‘excess’ revenue-based 2022 UK levy scenario, we show the impact on the most exposed oil majors - led by BP [and] TotalEnergies - is less than 1% market cap/gearing…while key utilities - Drax, SSE, EDF - appear increasingly distanced from latest policy reports.

"As such we reiterate our positive stance on UK energy."

It noted that the UK-exposed stocks with ‘overweight’ ratings were Shell, BP, Repsol, EnQuest, out of the oil majors, and RWE and Drax among utilities.


News Source: © 2022 Web Financial Group (UK) Limited. All rights reserved and terms of use apply.

Important Legal Notice about News Sources: Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news and we may not share the views of the author or publisher. We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.

The value of investments can fall and you may get back less than you invested.

 

Important Legal Notice about News Sources

Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news articles and we may not share the views of the author or publisher.

We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.

The value of investments can fall and you may get back less than you invested.