On Tuesday, Stifel announced that it had initiated coverage of Engie shares with a Buy recommendation and a price target of 18.2 euros, equivalent to a 36% upside potential.

In a research note, the research firm explains that it considers the group to be a leader in the global energy transition, but that its valuation is "cheap" at current levels.

Stifel expects the share price to rise before the recovery of more buoyant businesses such as power grids, wind power and solar energy, all of which offer good visibility in terms of cash flow.

The improvement in this profile should enable the management team to support its two strategic priorities, dividend payout and optimization of the capital structure, he adds.

According to Stifel, the recent downturn in the share price due to the upheavals linked to the French political situation represents an interesting entry point, particularly for yield-seeking investors.

Lastly, the analyst says he sees possible upward revisions to market forecasts for 2025/2026 as a result of the recent surge in energy prices.

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