UPDATE: Deutsche Bank Upgrades Calpine to Buy on Multiple Positive Factors

In a report published Friday, Deutsche Bank analyst Keith Stanley upgraded the rating on Calpine CPN from Hold to Buy, and raised the price target from $21.00 to $23.00.

In the report, Deutsche Bank noted, “We find the story to be simple and attractive with a concentrated focus on gas-fired generation, solid FCF, accretive M&A, and return of capital to shareholders. CPN now has considerable relative appeal within the utility sector as rising interest rates are a risk for higher yielding regulateds and the weak PJM capacity auction results drive negative sentiment among diversifieds. CPN has a geographically diverse fleet that is less concentrated in PJM (20% of EBITDA), returns significant capital to shareholders through buybacks, and has outsized leverage to a more likely positive catalyst in Texas.”

Calpine closed on Thursday at $20.30.