SSE (SSE) have barely moved this year, trading around 2,441p as I write, well below the 52-week high of 2,767.5p reached earlier in 2026. Yet behind the flat share price, the company is pushing ahead with one of the biggest investment programmes in its history.
Its first-quarter trading update, released alongside its AGM, showed networks investment rising 83% year on year to £888m, while renewable output increased 31% to 3.26TWh, helped by improved weather conditions and new capacity at Dogger Bank B.
The company also maintained adjusted earnings per share guidance of 168p to 193p for 2026/27, broadly matching analyst expectations of 183p. At the midpoint, that would represent around 18% growth after EPS fell 5% last year as spending increased faster than profits.
SSE is prioritising future earnings over short-term returns
The key point for investors is that SSE is currently accepting weaker near-term cash flow to build a much larger regulated asset base.
The company plans to invest £33bn over five years, with around 80% focused on regulated electricity transmission and distribution networks. Capital expenditure is expected to reach a record £5bn this year, following last year’s £3.6bn figure.
That spending does not immediately translate into higher earnings, but it expands the regulated asset value that supports future returns.
Regulated networks remain the investment case
SSE’s regulated asset value has already increased to £15.6bn from £12.9bn, and management expects the wider asset base to continue growing strongly through the investment plan.
This is why most analysts remain positive despite concerns over execution. Goldman Sachs moved the shares to Hold in March, highlighting the risk of delivering projects on time and within budget, but several other major brokers continue to rate the stock as a Buy with targets above the current share price.
The attraction is the predictable income stream created by regulated networks, with returns linked to an expanding asset base rather than relying solely on market conditions.
Valuation looks reasonable but income appeal has fallen
SSE trades on a forward price-to-earnings ratio of around 13 times, close to its own long-term average and still below some utility peers with similar growth expectations.
The dividend has continued to rise, with the full-year payout reaching 68.7p after a 7% increase. However, the yield of around 2.8% to 3% is below SSE’s historical average because the share price has recovered faster than the dividend has grown.
Funding also remains under control, with SSE raising new hybrid and senior debt during the quarter while keeping within its investment-grade balance sheet targets.
Delivery is the main risk
The biggest challenge is execution. Delays or cost overruns on major projects, including the Netherton Hub substation and Western Isles HVDC link, could affect expected returns.
For now, SSE’s investment case rests on a simple trade-off: investors are accepting slower progress today in return for a much larger regulated business tomorrow. With earnings guidance intact and asset growth accelerating, the shares still appear to offer value if management delivers on the plan.