Hard to justify further potential return – Snam is the exception
* Defensive attractions amply priced in with many companies trading at wide PE and/or RAV premiums
* Lower sovereign risk is a tailwind but creates danger of lower medium term returns combined with lack of inflation
* We prefer gas to power, initiating at UW for REE (TP EUR61) and Terna (TP EUR3.90). Our preferred stock is Snam (OW, TP EUR4.80) followed by Enagas (Neutral, TP EUR23)