The firm’s Dan Eggers said that the integrated power sector looks set up for a positive change in numbers on first-quarter earnings calls. This represents a reversal in falling power prices, and likely estimates that have worked against the stocks for the past six quarters or so.
Eggers did note:
We still think implied valuations for Generation assets are rich, but can see how a change in trend could capture broader market interest and provide for an upward trade into and around earnings results as the Street raises mark-to-market based estimates.
Exelon Corp. (NYSE: EXC) is said by the firm to offer the greatest leverage to estimate revisions, and it also should benefit from quarterly improvements in ExGen open profit disclosures. The firm only has a neutral rating and a $33 target. Entergy Corp. (NYSE: ETR) was maintained Neutral. Elsewhere …
American Electric Power Co. (NYSE: AEP) is maintained as Outperform, and the target was raised to $52 from $50, along with higher estimates.
FirstEnergy Corp. (NYSE: FE) was maintained as Outperform but the target price was cut to $45 from $46, and earnings estimates were trimmed by about 1%.
Public Service Enterprise Group Inc. (NYSE: PEG) was maintained as Underperform and the target was less than the share price. But that target price was raised to $42 from $29.50, and its earnings estimates were raised slightly as well.
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