Goldman Sachs Downgrades El Paso Electric Company (EE) to Neutral

Goldman Sachs downgraded El Paso Electric Company (NYSE: EE) from Conviction Buy to Neutral with a price target of $34.

The downgrade comes as regulatory risk increases, given the harder than expected line taken by the El Paso City Council in a rate case, the firm notes. They now expect a interim rate reduction in 4Q2011, driving our 2012 EPS estimate below consensus.

While the stock looks attractive over the long-term on strong demand growth, the rate case process should serve as an overhang through late 2012, Goldman states.

For more ratings news on El Paso Electric Company click here and for the rating history of El Paso Electric Company click here.

Shares of El Paso Electric Company closed at $31.93 yesterday, with a 52 week range of $22.91-$35.65.

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