UPDATE: J.P. Morgan Upgrades EnerNOC to Overweight, Reiterates $18.50 PT on Valuation

In a report published Friday, J.P. Morgan analyst Paul Coster upgraded the rating on EnerNOC ENOC from Neutral to Overweight, and reiterated the $18.50 price target. In the report, J.P. Morgan noted, “We are upgrading ENOC to Overweight, from a long-standing Neutral, based on valuation. The stock is up over 100% y/y but has retraced 32% from a May 21st high of $18.70 owing to a disappointing outcome from the 2016/2017 year PJM BRA auction. This pull-back offers a more favorable risk-reward tradeoff, owing to good visibility into revenue and earnings growth in 2013 through 2015, with plenty of time for the company to identify domestic and international revenue backfill ahead of the 2016 down-year. The longer-term uncertainty weighs on the stock, but ENOC is now trading at the trough level multiples witnessed in early 2012, when PJM market changes last weighed. It's not an ideal set-up, but we think the stock can work on the long side from here on contract wins that back-fill for the 2016 revenue hole. No change to estimates. Price target remains $18.50.” EnerNOC closed on Thursday at $12.90.