Citi downgraded SSE on Friday to 'sell' from 'neutral' and cut the price target to 1,997p.
"SSE's equity issue has removed near-term overhang, and 2029/30 EPS target (225-250p) and five year capital allocation have provided improved visibility," the bank said.
"At the same time, SSE shares have re-rated close to 40% over the last two months and up 17% yesterday alone."
Citi said it sees such a share price move as excessive and that it does not reflect the fundamentals, especially given what's likely to be a limited upward revision to consensus earnings and the fact the shares are now implying a 65% premium to FY27 RAB or renewable/thermal EV/EBITDA of circa 10x or sub-3% dividend yield.
"While we understand the relative appeal of SSE shares on headline multiples versus a fully-valued sector, our rating and price target are absolute, which leave us with limited upside," it said.
At 0950 GMT, the shares were down 1.4% at 2,232p.