UPDATE: Deutsche Bank Initiates UIL Holdings at Hold; Earnings Confidence Priced In
Deutsche Bank initiated coverage on UIL Holdings (NYSE: UIL) with a Hold rating and a $38.00 price target.
Deutsche Bank commented, "We expect UIL to deliver EPS CAGR of 8% through 2015 driven primarily by the conversion of heating oil customers to natural gas. Despite above-average earnings growth, we are not expecting UIL to deliver any dividend growth over the next four years given a high current payout ratio (85%), above average leverage (62% debt-to-total cap), and negative free cash flow, which will likely require equity issuance. We see modest total return potential of about 1%, including a 4.4% dividend yield."
UIL Holdings closed at $39.19 on Thursday.
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