DAVY VIEW

We expand our coverage of the renewable infrastructure sector, initiating on Greencoat UK Wind (UKW) with an ‘Outperform’ rating and The Renewables Infrastructure Group (TRIG) with a ‘Neutral’ rating. A sector historically defined by predictable operating conditions has been forced to contend with greater end-market volatility of late. The equity risk premium implied by portfolio returns has reduced, with the sector now trading at a discount to net asset value (NAV) as a result. However, the valuation de-rating has been indiscriminate, meaning the superior returns profiles of UKW and Greencoat Renewables (GRP), already ‘Outperform’, are now being overlooked. As such, we think both stocks represent compelling opportunities for investors.