* Verbund upgraded from Sell to Hold
* Share price collapse is not yet a buying opportunity
* EDF (Sell) and Fortum (Sell) still look expensive
* Waiting for nuclear risks to clear on E.ON (Hold) and RWE (Hold)
* Engie (Buy) still looks like the clearest value play
Valuation and risks
We value the generators using a sum of the parts approach with DCFs for power stations based on $60/bbl oil. For E.ON and RWE we set targets based on 13x earnings risked for a 20% increase in nuclear provisions and 3.5x net debt/EBITDA. Upside risks include a rebound in commodity prices, tight power markets and reassurance on leverage. Downside risks include lower discount rates for nuclear liabilities and credit rating downgrades.