JPMorgan Downgrades CenterPoint Energy (CNP) to Neutral

JPMorgan analyst Jeremy Tonet downgraded CenterPoint Energy (NYSE: CNP) from Overweight to Neutral with a price target of $29.00 (from $32.00).

The analyst comments: "CNP has come under continued severe pressure for its Hurricane Beryl storm response, with prolonged outages and communications issues leading to push back from TX politicians and regulators. This has culminated in the unexpected withdrawal of CNP's CEHE rate case application in the face of continued scrutiny from the state. This sudden pivot and broader rhetoric in TX on various potential penalties for CNP have now built into a meaningful overhang feeding into continued stock underperformance. We do not expect near term recovery given likely lingering market concerns regarding downside scenarios until clarity emerges on storm takeaways, executing against the governor's plan, a new path forward for the rate case, storm cost recovery, and any legislative changes or other impacts to the utility. Financial concerns over the implications on credit metrics could also add to the uncertainty, with all these factors combining to overshadow robust TX load growth tailwinds. While we note that CNP will likely continue to benefit from Houston's strong economic backdrop and new rates in other service territories, we no longer view the prior premium as justified and expect a longer journey to regaining the confidence of all stakeholders."

For an analyst ratings summary and ratings history on CenterPoint Energy click here. For more ratings news on CenterPoint Energy click here.

Shares of CenterPoint Energy closed at $28.15 yesterday.

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