Document summary
Investors should look carefully at the renewables-over-nuclear trade arisen since the Fukushima nuclear power plant crisis, with a view towards reducing names with weak business models ahead of a disappointing Q1 2011. CA Cheuvreux prefers segments with high entry barriers and names with strong finances and differentiated business models namely solar upstream, offshore wind and particularly energy efficiency. The industrials sector is a net beneficiary in almost any nuclear-related scenario; its geographic diversification mitigates risk from a slowdown of nuclear in Europe or the US. Higher regulatory risk, elevated risk premiums and lost earnings from reactor shutdowns remain a challenge.