UPDATE: BMO Capital Markets Raises PT on Calpine Following Investor Conference

In a report published Thursday, BMO Capital Markets analyst Michael S. Worms reiterated an Outperform rating on Calpine Corporation

, and raised the price target from $23.00 to $25.00. In the report, Worms noted, “At yesterday's investor conference, management updated the company's outlook and provided color on power market fundamentals as they relate to each of their markets. Key takeaways from the conference include: 1) Management is bullish on power market fundamentals; 2) ERCOT power forwards do not fully reflect impact of scarcity pricing in outer years; 3) New-build spark spread economics in Texas could be ~$38/Mwh versus our previous estimate of $30/Mwh; 4) High-cost demand response comprises ~10% of PJM's peak demand, which should create meaningful uplift in power prices; and 5) Southeast fleet could potentially be able to contract the remaining three plants as the region is expected to be meaningfully short generation by 2017.” Calpine Corporation closed on Wednesday at $20.88.