UPDATE: Jefferies Downgrades El Paso Electric Company to Hold on Revised Estimates for 2014

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Jefferies reduced its rating on El Paso Electric Company
EE
from Buy to Hold and reiterated a $34.50 target price. Jefferies noted, "We are downgrading El Paso Electric to Hold from Buy based on a $0.15 downward revision of our 2014 earnings estimate to $2.50. Our revised model assumes lower rate base particularly in the 2014-2015 time period. … Taking our 2014 EPS estimate of $2.50 in conjunction with an 13.7x P/E multiple, an average multiple for regulated utilities, we arrive at a price target of $34.50. Based on yesterday's closing price of $34.05, our current price target represents a 12-month price appreciation and total return potential of 1.3% and 4.2%, respectively, including the company's dividend yield of 2.9%." El Paso Electric Company closed at $34.05 on Wednesday.
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Posted In: Analyst ColorDowngradesPre-Market OutlookAnalyst RatingsJefferies
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