LONDON (Reuters) - Goldman Sachs removed Italian state-controlled utility Enel (ENEI.MI) from its “conviction list” of favourite stocks on Friday, saying the energy policy plans of the 5-Star and League parties could dent prices.
While analysts at the U.S. bank highlighted some positives from the parties’ plan to drive higher investment in renewables and the power grid, they argued that reaching near 100 percent renewables penetration would push prices down.
“The plans presented by M5S/Lega could be deflationary in our view as it would lower power bills by around 15 percent, we estimate,” said analysts at the U.S. bank in a note.
Goldman kept its “buy” recommendation on the stock, however.
Italy’s two anti-establishment parties agreed the basis for a governing accord on Thursday that would slash taxes and ramp up welfare spending.
Reporting by Helen Reid; editing by Danilo Masoni