Barclay's Top Power Sector Plays for 2013 (NRG) (NEE)
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Rating Summary:
15 Buy, 7 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 6 | Down: 10 | New: 1
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Barclay's top Power sector plays for 2013 are NRG Energy, Inc. (NYSE: NRG) and NextEra Energy, Inc. (NYSE: NEE). Analysts believe location and business model are likely to separate winners from losers in U.S. Power in 2013.
"The Electric Reliability Council of Texas (ERCOT) is the only competitive power market in the US expected to have a reserve margin below 15% over the next 5 years. Gross margins will have to expand to maintain reliability in that location, which should be positive for incumbent generators. We also believe that Power companies with long term contract business models, namely renewable owners and emerging market companies will outperform due to the predictability of those models," said Barclay's.
Other power companies with Overweight ratings include AES Corporation (NYSE: AES), Calpine Corp. (NYSE: CPN), Covanta Holdings (NYSE: CVA).
"The Electric Reliability Council of Texas (ERCOT) is the only competitive power market in the US expected to have a reserve margin below 15% over the next 5 years. Gross margins will have to expand to maintain reliability in that location, which should be positive for incumbent generators. We also believe that Power companies with long term contract business models, namely renewable owners and emerging market companies will outperform due to the predictability of those models," said Barclay's.
Other power companies with Overweight ratings include AES Corporation (NYSE: AES), Calpine Corp. (NYSE: CPN), Covanta Holdings (NYSE: CVA).
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