UBS Remains Bullish on PPL Corp. (PPL) Following Long-Term Outlook Update
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UBS maintained a Buy rating on PPL Corp (NYSE: PPL), and cut the price target to $39.00 (from $41.00), following the company's long-term outlook update. Forecasters expect continued weakness in the GBP exchange rate which has given many investors pause about investing in PPL. UBS forecast predicts 1.29/1.20 for YE16/YE17 and if that materializes, there is further ~$0.05-$0.10 EPS downside for 2018-2019.
Analyst Julien Dumoulin-Smith commented, "Following PPL’s long-term outlook update on Tuesday, we are revising our EPS estimates for (1) management’s decision to monetize its GBP F/X hedges and (2) reduced expectations for the US business. The US moderation was more surprising and while we still forecast 7-8% growth in Pennsylvania, this is a step-down from the prior period (~9-10%). The combination of these two factors drives a 9-10% reduction in 2017E/2018E UBSe adjusted EPS and a more modest 3% reduction in 2020E. We now estimate a 5.4% 2017-2020E adjusted EPS CAGR with our $2.54 2020E near the top end of the implied $2.49-$2.56 outlook range."
Shares of PPL Corp closed at $36.03 yesterday.
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