Deutsche Bank on Utilities and Power - Revisiting Regulated Utility Valuations

June 20, 2011 10:28 AM EDT Send to a Friend
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Deutsche Bank on Utilities and Power - Revisiting Regulated Utility Valuations

Deutsche analyst said, "With this mid-year update we are refreshing target valuations for our regulated utility names. We have also refreshed the regulated utility component of the valuations for our less-regulated (diversified) coverage although we have generally not made adjustments to merchant and non-regulated components today. In terms of highlights our core target regulated multiple moves from 12x to 12.5x 2013E reflecting mostly time value. We have also downgraded one name – Dominion (NYSE: D) – from Buy to Hold after recent outperformance."

"Buy-rated regulated names where we have raised our price targets are CMS (NYSE: CMS) (from $20.50 to $21), American Electric (NYSE: AEP) (from $39 to $40.50) and ITC Holdings (from $74 to $76.50). Among our less-regulated Buys we have raised our target for Edison (NYSE: EIX) (from $42 to $44) while our target for Public Service (NYSE: PEG) remains unchanged at $38 as a higher regulated valuation is offset by a slight reduction in our 2012-13 estimates at Power."


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