Barron's Says CenterPoint (CNP) Investors Not Being Optimistic Enough
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Price: $43.13 -0.48%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.2%
EPS Growth %: +27.6%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.2%
EPS Growth %: +27.6%
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Shares of CenterPoint Energy (NYSE: CNP) are up 1.4 percent just after Wednesday's opening bell following a bullish article from Barron's late Tuesday.
The publication argues that while the stock rose nearly 10 percent on March 18th when it won a court case against the Texas Public Utility Commission regarding how much it can charge for electric power, investors are not being optimistic enough.
The decision, according to the press release, will allow CenterPoint to recoup up to $922 million plus interest.
Barron's cites a recent Credit Suisse note which predicts the decision could add up to an additional $4 per share to CenterPoint's stock price.
CenterPoint also talked about creating a master limited partnership, allowing for the possible reduction of corporate tax exposure.
Barron's notes valuation on CenterPoint, trading at about 14.5x forward earnings with a long-term growth rate of about five-percent, is in-line with peers. Considering the $922 million in potential cost recovery, however, interest could amount to $400 million, adding another $0.94 per share to the stock's price.
Consolidation in the sector could be another boon for CenterPoint, though the company itself may not be a takeover target.
CenterPoint also has plenty of cash and little near-term debt on the books, raising the potential for possible stock buybacks in the near future.
CenterPoint shares have opened more than 1.5 percent higher Wednesday.
The publication argues that while the stock rose nearly 10 percent on March 18th when it won a court case against the Texas Public Utility Commission regarding how much it can charge for electric power, investors are not being optimistic enough.
The decision, according to the press release, will allow CenterPoint to recoup up to $922 million plus interest.
Barron's cites a recent Credit Suisse note which predicts the decision could add up to an additional $4 per share to CenterPoint's stock price.
CenterPoint also talked about creating a master limited partnership, allowing for the possible reduction of corporate tax exposure.
Barron's notes valuation on CenterPoint, trading at about 14.5x forward earnings with a long-term growth rate of about five-percent, is in-line with peers. Considering the $922 million in potential cost recovery, however, interest could amount to $400 million, adding another $0.94 per share to the stock's price.
Consolidation in the sector could be another boon for CenterPoint, though the company itself may not be a takeover target.
CenterPoint also has plenty of cash and little near-term debt on the books, raising the potential for possible stock buybacks in the near future.
CenterPoint shares have opened more than 1.5 percent higher Wednesday.
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