UPDATE: ISI Group Reiterates Neutral Rating, Lowers PT on Pepco Holdings

In a report published Friday, ISI Group reiterated its Neutral rating on Pepco Holdings

, but lowered its price target from $20.75 to $18.50. ISI Group noted, “Today Con Edison disclosed that on 1/9/13 the US Court of Appeals for the Federal Circuit issued a decision disallowing tax deductions claimed by ED relating to a 1997 transaction in which the company leased property and then immediately subleased it back to the lessor (a “lease-in, lease-out” transaction, or LILO). This decision reverses the October 2009 order by the United States Court of Federal Claims in favor of the company. ED's exposure could be ~$370mm.” Pepco Holdings closed on Thursday at $19.42.