Goldman Sachs Picks Top European Utility Stocks for Earnings Season

Goldman Sachs is optimistic about the upcoming earnings season for several European utility companies, identifying RWE, Naturgy, Enel, and Energias de Portugal (EDP) as potential standout performers. The investment bank points to strong trading activities, flexible generation, and pumping hydro as key drivers, supported by commodity volatility, elevated prices, and robust power demand.

Goldman Sachs expects some companies to book restructuring provisions in the fourth quarter, which could limit earnings beats in 2026 but boost profits in 2027-28. For RWE, the bank projects nine-month net profit of €1.6-1.7 billion, about 75% of the full-year consensus estimate of €2.25 billion. RWE is set to report earnings on November 11.

Naturgy Energy Group is estimated to have nine-month EBITDA of €4.3-4.4 billion and net profit of approximately €1.75 billion. Goldman Sachs suggests Naturgy could exceed its full-year guidance of 'above €2.1 billion,' with solid gas prices and flexible generation expected to support results. Enel is projected to report nine-month EBITDA of €17.8 billion and net profit of €5.7-5.8 billion, representing over 75% of the bank's full-year projection of €7.47 billion. Enel reports on November 12.

Energias de Portugal (EDP) shows clear upside risk to full-year guidance, with third-quarter EBITDA nearing €1.2 billion, implying nine-month EBITDA at €3.9 billion. Strong profits from pumping and flexible generation, along with expected asset rotation gains of €200-250 million, could make EDP's full-year guidance of €5.3 billion EBITDA appear conservative. EDP reports on November 6.