UPDATE: UBS Upgrades Xcel Energy (XEL) to Neutral
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(Updated - September 19, 2016 8:18 AM EDT)
UBS upgraded Xcel Energy (NYSE: XEL) from Sell to Neutral with a price target of $40. Analyst Julien Dumoulin-Smith tied the upgrade to "execution successful."
"Despite our earlier concerns, mgmt. has proven successful at ultimately arguing its case for not just added capex, principally from renewables, but has also shown success in implementing a potential rate stayout in MN. While we continue to anticipate a low 9% earned ROE overall, the positioning towards incremental opportunities in MN after the rate case resolution coud enable additional opportunities (could still take till mid- 2017)," said Dumoulin-Smith.
The analyst added, "We upgrade to Neutral after shares retracted relative underperformance back to May levels despite the improvement in both the earned ROE prospects in MN as well as prospects for additional regulated capex to be filtered into our estimates. With staying out of M&A a core focus, XEL has become all the more of a defensive equity vs. peers for those seeking a consistent growth trajectory. Our PT remains derived via P/E SOP."
Shares of Xcel Energy closed at $41.20 yesterday.
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