UPDATE: DA Davidson & Co Initiates Buy, $41 on UniSource Energy

DA Davidson & Co initiates its coverage on UniSource Energy UNS to reflect improvements on the challenging regulatory environment that could lead to rate expansion. DA Davidson & Co notes, "The outcome of a general rate case filing this July will be a key factor in UniSource's financial success, as the company looks to collect returns on $400-$500 million of system investments made since the implementation of a base-rate freeze. Arizona's regulatory environment has had a checkered past, but recent developments give us confidence in a shifting climate toward a more balanced treatment for utilities." UNS closed at $35.25 a share on Tuesday.