Jefferies Lowers 2012 Estimates on PPL
Jefferies released a research report this morning that lowered its 2012 estimates on PPL Corporation (NYSE: PPL).
In the report, Jefferies commented, “Our price target of $31.50 is based on our sum-of-the-parts analysis. For PPL's utility operations (both UK and US), we are using a P/E analysis, which, based on a 2014 average multiple of 13.3x, results in a utility price target of $25.50. Using EV/EBITDAR on PPL Supply, we arrive at a $6.00 price target based on an 8.5x multiple on generation. Based on Friday's closing price of $28.45, this represents 12-month price appreciation and total return potential of 10.7% and 15.6%, respectively, including the company's current yield of 4.9%. Risks: PPL Supply generation has significant exposure to changes in the commodity prices for natural gas, power, and coal. The utility business is exposed to regulatory risk.”
Jefferies maintains its Buy rating and $31.50 PT on PPL, which is currently trading at $28.17.
