UBS Cuts Price Target on Calpine Corporation (CPN) to $16 Ahead of 3Q Report
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UBS maintained a Buy rating on Calpine Corporation (NYSE: CPN), and cut the price target to $16.00 (from $17.00), ahead of the company's 3Q report. UBS is expecting 3Q EBITDA to be $679 Mn, compared to the Street's $702 Mn estimate.
Analyst Julien Dumoulin-Smith commented, "Looking ahead to 3Q results, we think shares could potentially remain under some pressure in tandem with the rest of the sector as both quarterly estimates and FY17 guidance released by all three peers will be likely weak. We see potential strategic repositioning into both retail and nascent efforts into renewables as received well, but see risks around substantial deleveraging (given ~6x Net Debt/EBITDA) as a key concern across the sector. With the most substantive asset value given willingness to transact, and private market transactions supporting our ~7x EV/EBITDA, we're confident this equity could lead a recovery in the sector."
Shares of Calpine Corporation closed at $12.33 yesterday.
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