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Brean Capital Cuts WGL Holdings (WGL) to Hold Following Disappointing Q4 Results

November 14, 2013 3:09 PM EST Send to a Friend
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Price: $39.41 --0%

Rating Summary:
    1 Buy, 2 Hold, 1 Sell

Rating Trend: Up Up

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Brean Capital downgraded WGL Holdings (NYSE: WGL) from Buy to Hold. The change follows disappointing Q4 results and guidance.

"We found FY4Q13's large miss somewhat disturbing from the perspective of the company's lack of visibility into the Retail Energy segment, which in prior quarters has contributed meaningfully to quarterly earnings results," said analyst Michael Gaugler.

"For us, it doesn't generate a high level of confidence that this segment can return to historical profitability levels given the commentary about a more competitive environment, and the need to reprice contracts to incorporate additional costs, which may or may not be signed. For valuation purposes, we've moved to 2015 forecasts, and applying a 17x P/E multiple to our FY15 Non-GAAP EPS estimate of $2.51 generates a fair value for WGL shares of $42.67, approximately where the
shares are trading now," he added.

For an analyst ratings summary and ratings history on WGL Holdings click here. For more ratings news on WGL Holdings click here.

Shares of WGL Holdings closed at $44.84 yesterday.

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