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Wells Fargo Downgrades PNM Resources (PNM) to Market Perform; Regulatory Concerns in New Mexico

December 12, 2011 7:23 AM EST
PNM Hot Sheet
Rating Summary:
    3 Buy, 3 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 16 | Down: 7 | New: 23
Wells Fargo downgraded PNM Resources (NYSE: PNM) from Outperform
to Market Perform, price target range of $17.50-$18.50 (from $18.50-19.50).

Wells analyst says, "Following PNM's conference call on December 9 to introduce 2012 EPS guidance, we are reducing our 2012E to $1.26 from $1.29 and our 2013E to $1.35 from $1.50. We are also introducing our 2014E of $1.49. Reflecting our new 2014E and a largely unchanged 4% P/E discount to PNM's peer median, we are lowering our valuation to $17.50-18.50 from $18.50-19.50. While we still see solid dividend and earnings growth from 2011-2014, we think concerns about the New Mexico regulatory environment will limit P/E multiple expansion. Thus, we are downgrading our rating."

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

Shares of PNM Resources closed at $17.94 yesterday, with a 52 week range of $12.13-$19.17.


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