Jefferies lowers its rating on Public Service Enterprise PEG from Buy to Hold and reduces its price target from $35 to $32.
Jefferies comments, "We are downgrading Public Service Enterprise Group to Hold from Buy based on valuation primarily due to the loss of the basis differential between New Jersey and PJM West. …We are reducing our 2012-14 estimates following an update of our forecast model for current forward commodity prices. The major driver of the estimate revision is a reduction of the basis differential between New Jersey and PJM West. Over the past several years this differential has provided PEG with a $4.00-$5.00 per MWh price premium. During the first quarter of 2012 the price differential between New Jersey and PJM has been negligible (well under $1.00 per MWh). When we adjust our model for this lower price we arrive at lower cash flow and earnings for the company's PSEG Power merchant power subsidiary."
PEG closed at $31.61 on Monday.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in