UBS Reiterates a 'Buy' on Calpine (CPN); Texas Remains The Market

UBS reiterates a 'Buy' on Calpine Corporation (NYSE: CPN) price target lowered $1 to $18.

UBS analyst says, "We hosted a call with Commissioner Anderson of the PUCT to discuss ongoing ERCOT market reforms. The call bolstered our confidence regulators will continue to pursue market-based solutions to build new capacity. We look for regulators to continue driving reforms until new entrant economics for brownfield CCGTs are reached at in the mid $20’s/MWh (up front $17-18/MWh currently in ’12.)"

"We reiterate Calpine as our top pick in the sector, with a tweaked $18/sh price target ($1/sh lower on commodity reduction in ‘13E), using the average of DCF ($20/sh), Hedged SOP ($19/sh), and Open SOP ($15/sh). The name has been the least impacted by the latest commodity price dip, and the only company in our universe to see a commodity-driven improvement in 2012E EBITDA of late."

For an analyst ratings summary and ratings history on Calpine Corporation click here. For more ratings news on Calpine Corporation click here.

Shares of Calpine Corporation closed at $15.17 yesterday.

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