Jefferies Raises Price Target on Progress Energy (PGN) Due to the Merger Offer Price

Jefferies is maintaining its Hold rating on shares of Progress Energy (NYSE: PGN) following the release of its Q3 results and is raising its price target from $51 to $54.50.

The company reported EPS of $1.16 for the quarter, well below the firm's estimate of $1.25. The firm notes that miss was largely due to a charge of $0.08 per share for replacing power disallowances in the Carolinas. Management reaffirmed its FY11 earnings guidance of $3.00-3.20 per share.

Jefferies is cutting its 2011 EPS estimate from $3.15 to $3.06 due to the recent quarterly results, but is reiterating its 2012, 2013 and 2014 EPS estimates of $3.15, $3.31 and $3.42 as managements performance remains steady.

An analyst at Jefferies comments, "Our price target of $54.50 is based on the merger offer price. Under the agreement, Progress shareholders would receive 2.6125 shares of Duke Energy (NYSE: DUK) stock for each share of Progress Energy they own."

For more ratings news on Progress Energy click here and for the rating history of Progress Energy click here.

Shares of Progress Energy closed at $53.18 yesterday.

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