DAVY VIEW

Like other listed renewable infrastructure operators, it is difficult to assess Greencoat UK Wind’s (UKW) current operating performance. On the one hand, portfolio valuations and financial results continue to decline, reflecting the normalisation of key macroeconomic drivers (in that context, we reduce our UKW estimates following its H1 2024 results). On the other hand, there is an understandable shape to the reversion in its performance. Looking through those near-term adjustments, the UKW investment case remains intact – it looks set to generate £2.9bn net cash over the 2024-2029 period (128p/share, c.90% of the current share price), which should accrue to equity holders via shareholder returns or net asset value (NAV) growth. As a result, and with the stock trading at an 11% discount to NAV, we reiterate our ‘Outperform’ recommendation with a modestly revised price target of 175p/share (previously 180p/share).