UBS Downgrades EnergySolutions (ES) to Neutral

(Updated at 3:10 pm)

UBS downgraded EnergySolutions (NYSE: ES) from Buy to Neutral with a price target of $53.00 (from $57.00). Analyst Julien Dumoulin-Smith noted NDPT delay and NH divestiture.

"With the Northern Pass Transmission project (NPT) in-service date now delayed toward the end of 2018, we're reducing our 2017 estimate $0.11 for the delay, although we still assume the project is approved (talks with all parties, including the NH Governor, will start in earnest after the EIS this summer) and our 2018+ estimates are unaffected," said Dumoulin-Smith.

"We are also reducing our 2017 estimate another -$0.04 for the impact of the divestiture of NH generation, with ~$731M of ratebase earnings at 8.59% ROE being replaced with debt reduction at 5% (while proceeds from divestiture could be reinvested more accretively, this is beyond our modelling and we give no credit). To achieve 6%-8% earnings growth through 2019, it's clear to us that both NPT and the Access Northeast pipeline are required (we see 6.0% at 30% credit for the pipeline)," added the analyst.

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

Shares of EnergySolutions closed at $50.50 yesterday.

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