UPDATE: ISI Group Reiterates Hold Rating, Raises PT on Dominion Resources

In a report published Friday, ISI Group reiterated its Hold rating on Dominion Resources D, and slightly raised its price target from $54.00 to $55.00. ISI Group noted, “We are maintaining our EPS forecast but raising our target price $1/share reflecting improved odds of the building of the Cove Point project. Dominion affirmed 2012 guidance of $3.10-$3.35, provided initial 2013 guidance of $3.20-$3.50/shr, and updated their long-term capital expenditure forecast, including a cost estimate for the Cove Point liquefaction project of $2.5-3.5bn and affirmed their long term earnings growth aspiration of 5-6%. D is selling 3,400 MWs of merchant power generation which will move the business mix to 80-90% regulated (by earnings). Proceeds from the sale will serve to offset what likely would have been a $500-$600m equity offering in 2013 as well as possibly offsetting some debt issuance needs, contingent on the sale price. The company will now expects to target a dividend payout ratio of 65-70%, up from 60-65%.” Dominion Resources closed on Thursday at $53.77.