KeyBanc Upgrades Northwestern Corp. (NWE) to Buy

KeyBanc upgraded Northwestern Corp. (NYSE: NWE) from Hold to Buy with a price target of $51.50.

"We have increased conviction that NorthWestern Corporation's (NWE-NYSE) acquisition of PPL Montana’s hydro assets will be approved. Given the meaningful accretion of growing rate base nearly 50%, we are upgrading shares to BUY and establishing a $51.50 price target," said analyst Paul T. Ridzon.

"We are maintaining our 2014 estimate of $2.70 and trimming our recently initiated 2015 estimate to $3.15 per share from $3.20 per share. In our view, NWE continues to have attractive investment opportunities around acquiring more natural gas reserves, distribution reliability and incremental peaking generation. In addition, NWE is exploring a transmission reliability program similar to the current program for its distribution assets. After the disappointing FERC ruling around the Dave Gates plant cost allocation, we believe only upside remains for opportunities to reduce the $0.12 per share of lost earnings power. While we appreciate the fact that shares are likely to be subject to an overhang from the need to issue up to $400 million of equity to fund the hydro acquisition, we believe investors with a longer-term perspective will be rewarded by commencing to build a position now. While the commission must rule on the acquisition by September, we do not discount the possibility a settlement could occur much sooner. Hearings are scheduled to start July 8," he added.

For an analyst ratings summary and ratings history on Northwestern Corp. click here. For more ratings news on Northwestern Corp. click here.

Shares of Northwestern Corp. closed at $48.00 yesterday.

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