SSEZY changes

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View the full Nov 12, 2026 version

Price: $35.89
Discount category: Far above intrinsic value
Intrinsic value source: AI estimate
Next earnings: Nov 18, 2026
Next earnings is estimate: No
Company name: added: SSE
Sector: added: Electric utility and renewable power
About: added: SSE plc (SSE) is a British energy company. It owns and runs electricity networks, wind, hydro and solar power, and flexible gas power plants. SSEN Transmission owns the high-voltage grid in the north of Scotland, and SSE holds 75% of it. SSEN Distribution runs local electricity networks. SSE Renewables runs wind, hydro and solar farms and builds Dogger Bank, an offshore wind farm. SSE Thermal runs flexible gas power plants with capacity market contracts, and Energy Customer Solutions sells energy products and services to business customers in Great Britain and to homes and businesses in Ireland. Regulated electricity networks were 72% of adjusted investment in 2025/26. Their regulatory asset value (RAV), on a 100% basis, was £15.6 billion at March 31, 2026. For 2025/26, adjusted operating profit was £2,236.6 million and adjusted EPS was 153.5p. SSE plans to invest £33 billion over five years. About 15,000 people work at SSE. The shares in this pick are American depositary receipts (ADRs): SSEZY is a sponsored Level I program with Deutsche Bank Trust Company Americas that trades over the counter in US dollars. One ADR equals one ordinary share (a ratio of 1:1, from SSE's ADR page). SSE is not an SEC filer, so its own English reports are the source. Martin Pibworth is Chief Executive.
Thesis: added: SSE trades above the AI estimate because investors pay for its regulated network growth, even though it must spend a record amount on networks before its earnings catch up. SSE plans to invest £33 billion over five years, about £5 billion this year. It sold £2 billion of new shares in November 2025, which helped lower adjusted EPS from 161.3p to 153.5p. Adjusted EPS also leaves out a deferred tax charge of 30.7p, so it is higher than the earnings after tax that the accounts show. SSE earns pounds while the ADR trades in dollars, so the exchange rate moves the ADR price. For the price to hold, three things must be true. Adjusted EPS must reach the guided 168p to 193p for 2026/27 and then 225p to 250p for 2029/30, a rise of 10% to 13% a year. Regulators must keep allowing returns on the new network assets: SSEN Distribution sends its ED3 business plan to the regulator in December 2026, and the 11 major SSEN Transmission projects must be built on time. And debt must stay near 3.3 times EBITDA while the plan is paid for. The half-year results on November 18, 2026 are the next test.
Valuation: added: The intrinsic value for SSE is an AI estimate from November 12, 2026. It is not an analyst's value. An AI research agent calculated it from SSE's own English reports on sse.com. SSE is not an SEC filer. The ADR, SSEZY, is a sponsored Level I program with Deutsche Bank Trust Company Americas that trades over the counter in US dollars. One ADR equals one ordinary share (a ratio of 1:1, from SSE's ADR page), so the value is per ADR. The method is a multiple of adjusted EPS for 2026/27, the year to March 31, 2027, in pence, converted to US dollars. Adjusted EPS is SSE's own measure and is after interest. It leaves out a deferred tax charge, which was 30.7p of the 153.5p for 2025/26, so the multiples are assumptions that allow for it, and the estimate makes no debt adjustment. The Annual Report 2026 gives adjusted EPS of 153.5p for 2025/26 (161.3p the year before, before the £2 billion share placing of November 2025 raised the share count), reported EPS of 105.5p, a full-year dividend of 68.7p, 1,212.2 million shares in issue at March 31, 2026, adjusted net debt and hybrid capital of £10,095.0 million (3.3 times EBITDA), and adjusted EPS guidance of 168p to 193p for 2026/27 and 225p to 250p for 2029/30. The trading update of October 1, 2026 expects half-year adjusted EPS of 64p to 68p, keeps both guidance ranges and expects adjusted net debt and hybrid capital of about £11.5 billion at the half year. The estimate assumes an exchange rate of $1.3349 per pound, the market rate on November 11, 2026. The 2026/27 adjusted EPS and the multiples are assumptions. The low case assumes 168p, the bottom of the guided range, at 11 times. It gives 1,848p, or $24.67 per ADR. The base case assumes 178p at 13.5 times. It gives 2,403p, or $32.08 per ADR. The high case assumes 190p at 16 times. It gives 3,040p, or $40.58 per ADR. The estimate assumes weights of 25%, 50% and 25%. The weighted intrinsic value is $32.35 per ADR. As of Nov 12, 2026.
Risks: added: Regulators set the returns on networks, which are about 72% of investment. The ED3 price control for SSEN Distribution starts after the business plan that SSE sends in December 2026, and a lower allowed return would lower earnings growth. SSE must build a record programme on time and on budget, including 11 major SSEN Transmission projects and the second phase of Dogger Bank. Delays or higher costs would lower returns and delay earnings. Renewables profit depends on weather and power prices. SSE expects flat adjusted operating profit from SSE Renewables in 2026/27 as new capacity offsets lower power prices. The Electricity Generator Levy rose from 45% to 55%. Spending is funded by debt and shares. Adjusted net debt and hybrid capital was £10.1 billion, and SSE expects about £11.5 billion at the half year. Scrip dividends add shares unless SSE buys them back. SSE earns pounds while the ADR trades in dollars, over the counter, with less trading than the shares have in London. A weaker pound lowers the ADR price in dollars even when earnings are steady.
Balance sheet: added: SSE reported adjusted net debt and hybrid capital of £10,095.0 million at March 31, 2026, against £10,066.7 million a year before. The ratio of net debt to EBITDA was 3.3 times, the average debt maturity was 5.7 years, and the average cost of debt, including hybrid coupons, was 4.1%. 92% of debt was at fixed rates. Adjusted net finance costs were £211.8 million. SSE raised £2 billion of equity in November 2025 and issued £2.5 billion of long-term debt and hybrid capital in 2025/26. In the quarter to June 30, 2026, SSE raised £1.1 billion of hybrid debt and £1.3 billion of senior debt. Shares in issue were 1,212.2 million at March 31, 2026, excluding 3.3 million treasury shares. The trading update of October 1, 2026 expects adjusted net debt and hybrid capital of about £11.5 billion at the half year, with capital investment of about £2.5 billion in the half. The recommended final dividend of 47.3p was paid on September 17, 2026. As of Mar 31, 2026.
Checkpoints: added: Nov 18, 2026: Half-year results: adjusted EPS and net debt. Pending. Watch: Adjusted EPS of 64p to 68p, net debt near £11.5 billion and unchanged full-year guidance pass; a cut to guidance fails. Dec 2026: SSEN Distribution ED3 business plan. Pending. Watch: A business plan sent to the regulator in December 2026 with investment that raises RAV passes; a delay fails. May 2027 (estimate): Full-year 2026/27 results: adjusted EPS. Pending. Watch: Adjusted EPS inside the guided 168p to 193p range passes; a result below 168p fails.
Recent events: added: Oct 1, 2026: SSE gave a trading update before its half-year results. It expects half-year adjusted EPS of 64p to 68p, adjusted investment about 70% higher than a year before, renewables output about 20% higher, capital investment of about £2.5 billion for the half year, and adjusted net debt and hybrid capital of about £11.5 billion. It repeated its adjusted EPS guidance of 168p to 193p for 2026/27 and 225p to 250p for 2029/30. Sep 17, 2026: SSE paid its final dividend of 47.3p per share. With the interim dividend of 21.4p, the full-year dividend for 2025/26 was 68.7p, up 7% from 64.2p. Sep 2, 2026: SSE held an investor event on SSEN Transmission and published the presentation on its website. Jul 16, 2026: SSE gave its Q1 trading statement on the day of its annual general meeting. Investment in networks was up 83% from a year before, renewables output was up 31%, and SSE repeated its adjusted EPS guidance. Coire Glas pumped hydro storage was on the regulator's list of projects it is minded to support with a cap and floor. In the quarter, SSE raised £1.1 billion of hybrid debt at an average cost of 4.6% and £1.3 billion of senior debt at an average cost of 5.1%. Jul 16, 2026: SSE appointed John Pettigrew, a former executive of National Grid, as an independent non-executive director from December 1, 2026. May 28, 2026: SSE reported full-year 2025/26 results. Adjusted EPS was 153.5p, down 5% on 161.3p because of the November 2025 share issue, and reported EPS was 105.5p. Adjusted net debt and hybrid capital was £10.1 billion, 3.3 times EBITDA. SSE invested £3,585.6 million on an adjusted basis.