S&P increased its target price to €22 but lowered its recommendation on the grounds that the stock was above the target having soared 84 per cent in the past year.
Analyst Clive Roberts said the 35-year index-linked strike price agreed this week and anticipated 10 per cent return were offset by other risks. “Construction cost overruns will be borne by EDF and any savings must be shared with customers” he said and warned that: “The deal must first circumnavigate the European Commission’s rules on state aid.”
S&P expected EDF to invest £3.5 billion in Hinckley Point C over the construction period, prior to selling 50-55 of the equity.