DA Davidson Starts Wisconsin Energy (WEC) at Neutral; Rare Free Cash Flow Positive Utility Primed For Shareholder Rewards
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Price: $110.52 +1.09%
Rating Summary:
9 Buy, 18 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 6 | Down: 4 | New: 7
Rating Summary:
9 Buy, 18 Hold, 2 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 6 | Down: 4 | New: 7
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DA Davidson initiates coverage on Wisconsin Energy (NYSE: WEC) with a Neutral. PT $36.00.
DA analyst said, "With the completion of a multi-year building program now approaching, and nearly 40% of the firm’s projected earnings tied to low-risk, high-return investments, we view Wisconsin Energy as an attractive option for income-oriented investors. As a larger portion of these investment returns are realized, cash flows to shareholders are likely to rise through increased dividend payments and a share buyback program."
"Earnings through 2013 should be driven higher by the rate basing of new utility projects and the completion of rate cases in Wisconsin and Michigan. Our price target equates to 15.5x the average of our 2012-2013 EPS estimates of $2.27 and $2.38, respectively, and reflects our view that the shares are trading near fair value. Although the firm’s relatively favorable regulatory backdrop, attractive returns on nonregulated assets, and sizeable equity stake in ATC would normally fetch a premium valuation, these positive aspects are largely offset by the firm’s limited prospects for earnings growth and our expectation of a below-average dividend yield."
For an analyst ratings summary and ratings history on Wisconsin Energy click here. For more ratings news on Wisconsin Energy click here.
Shares of Wisconsin Energy closed at $34.51 yesterday.
DA analyst said, "With the completion of a multi-year building program now approaching, and nearly 40% of the firm’s projected earnings tied to low-risk, high-return investments, we view Wisconsin Energy as an attractive option for income-oriented investors. As a larger portion of these investment returns are realized, cash flows to shareholders are likely to rise through increased dividend payments and a share buyback program."
"Earnings through 2013 should be driven higher by the rate basing of new utility projects and the completion of rate cases in Wisconsin and Michigan. Our price target equates to 15.5x the average of our 2012-2013 EPS estimates of $2.27 and $2.38, respectively, and reflects our view that the shares are trading near fair value. Although the firm’s relatively favorable regulatory backdrop, attractive returns on nonregulated assets, and sizeable equity stake in ATC would normally fetch a premium valuation, these positive aspects are largely offset by the firm’s limited prospects for earnings growth and our expectation of a below-average dividend yield."
For an analyst ratings summary and ratings history on Wisconsin Energy click here. For more ratings news on Wisconsin Energy click here.
Shares of Wisconsin Energy closed at $34.51 yesterday.
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