Deutsche Bank Upgrades TECO Energy (TE) to Hold; Sector Laggard in 2011, but Limited Absolute Downside Given a 4.9% Forward Yield

Deutsche Bank upgraded TECO Energy (NYSE: TE) from Sell to Hold, price target raised $1 to $17.

Deutsche analyst says, "While our sum-of-the-parts valuation methodology continues to imply that the market is placing too high a value on TE’s utility and coal mining subsidiaries, we believe the company’s secure dividend yield significantly limits downside in the current market environment and no longer believe it is appropriate to keep our Sell rating. We expect TE to be free cash flow positive through 2014 even under more conservative coal price forecasts, which should give the company the ability to raise its dividend. Based on our 2012 estimated DPS of $0.89, TE is trading at a 4.9% yield vs. an average of 4.3% for regulated and diversified utilities and the 10-year treasury yield below 2%."

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

Shares of TECO Energy closed at $17.99 yesterday.

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