El Paso Electric Anticipating Steady Growth

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El Paso Electric Co.
EE
is viewed as a low risk utility with above average growth earnings. Rate increases in both jurisdictions through 2010-2011 are expected to continue improving earnings, thanks to the main drivers of higher retail non-fuel revenues and greater PV3 pricing, according to Jefferies & Company, Inc. The second quarter and full year estimates are being increased from $0.20 to $0.40 and $1.75, respectively, and the 2011 and 2012 EPS estimates are remaining at $1.85 and $2.10, respectively. The risks involved are that the company is exposed to regulatory risk in New Mexico and Texas and operational risk at the Palo Verde nuclear plant. Based on yesterday's closing at $20.70, the price target represents a 12-month appreciation and return potential of 18.4%. The company does not pay a dividend.
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Posted In: Analyst ColorNewsIntraday UpdateAnalyst Ratingsabove averageEl Paso Utilitylow riskutility
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