Portland General Electric Company (POR) Cuts Guidance Due to Rogue Trades - Guggenheim

Guggenheim analyst Shahriar Pourreza reiterated a Neutral rating and $45.00 price target on Portland General Electric Company (NYSE: POR) after the company announced that its energy portfolio has experienced realized losses of $104mm through 8/24 and unrealized MtM losses of $23mm, with two employees put on leave pending further review. The losses, which may reach up to $155mm for the quarter, stem from volatility and imbalances in the western grid this month due to issues in CAISO, where LMPs spiked over $1,000/MWh for certain intervals last week amidst a record heat wave. The losses will flow through the net variable power costs (NVPC) for the third quarter, and as a result 2020 EPS guidance has been lowered to $1.30-1.60 from $2.30-2.50.

The analyst believes the impact will be limited stating "While the announcement is an unpleasant surprise, the loss is containerized to 3Q, with the company concurrently reaffirming its long-term 4-6% EPS growth rate, maintaining its dividend plans, and already holding discussions with the ratings agencies. POR had a strong liquidity position coming off COVID in 2Q and plans to issue some additional L-T debt to cushion the impact. We see this as an unfortunate one-off event".

For an analyst ratings summary and ratings history on Portland General Electric Company click here. For more ratings news on Portland General Electric Company click here.

Shares of Portland General Electric Company closed at $41.96 yesterday.

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