MS sees European utilities outperforming, prefers big caps

** Morgan Stanley expects European utilities to continue outperforming the market in 2027 and shifts its preference to large caps

** MS expects "high-quality" growth underpinned by the wider themes of energy security, electrification and powering AI

** It selects British power grid operator National Grid NG.L as its top pick, while Italy's Enel is its least preferred name among "The Big Six"

** Its order of preference is National Grid, RWE RWEG.DE, Engie ENGIE.PA, Iberdrola IBE.MC, E.ON EONGn.DE and Enel ENEI.MI

** MS raises its rating on Iberdrola to "overweight" from "equal-weight" as it expects EPS upgrades; cuts E.ON EONGn.DE to "equal-weight" from "overweight" citing valuation