Industrial and Commercial Bank of China: The US utility sector is undervalued, structurally shifting towards "growth stocks".

Analysts at Wells Fargo & Company said on Tuesday that the valuation of the U.S. utilities sector is severely undervalued, driven by a series of favorable factors. They believe that investors' mindset will continue to shift towards viewing utilities as a growth-oriented industry rather than income-oriented, as growth will become a more important investment rationale and driving factor in terms of total return. The Wells Fargo & Company analyst team, led by Shahriar Pourreza, wrote, "This is not just a passing trend!" They stated that the old belief that the utilities industry is a defensive or income-oriented investment no longer applies - the defensive nature of the industry only provides a bottom support for the market, limiting downside risk, while the flexibility of upside exists in various themes that should continue to attract investors' interest, including growth, value, infrastructure, and ordinary investors. The key, according to Wells Fargo & Company, is that the fundamental market supply and demand dynamics support their bullish view on the industry. The bank said, "This growth is non-cyclical, representing a structural change and serving as the engine for growth in utilities and independent power companies." The bank included Constellation Energy (CEG.US) in their top investment recommendations for independent power producers, believing it is the best way to capture opportunities in large-scale enterprises and the trend of ample resources; they also included Sempra (SRE.US) in their top investment recommendations for utilities companies, considering it an ideal buying opportunity before the critical adjustment period in February, especially given the current valuation level, with the stock still trading at a discount and growth at the highest quartile level.