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UPDATE: Bank of America Reiterates on UIL Following News of PGW Deal

Related UIL
JP Morgan Upgrades UIL Holdings To Neutral
Benzinga's Top Upgrades

In a report published Tuesday, Bank of America analyst Brian Chin reiterated a Neutral rating on UIL (NYSE: UIL), but lowered the price target from $41.00 to $39.00.

In the report, Bank of America noted, “On 3/3/14, UIL announced it was the winner of the auction to purchase Philadelphia Gas Works (PGW). UIL will pay $1.86 billion for PGW, funded with both debt and equity (we assume two-thirds debt and one-third equity). The price is at the high end of PGW's advisor's estimated range of $1.45 – 1.9 billion. Based on our initial assessment of the deal in our 3/2/14 UIL note, we believed the deal could have been earnings and value accretive if UIL paid at the midpoint of the advisor's range.

"At $1.86 billion, we still believe the deal could be modestly EPS accretive in 2018 and beyond, however, this is more than offset by opacity on earnings potential of PGW and the technical overhang on shares in the near term given the expectation of an equity issuance in early 2015 when the deal is expected to close.”

UIL closed on Monday at $36.97.

Latest Ratings for UIL

Mar 2015Argus ResearchDowngradesHoldSell
Mar 2015RW BairdDowngradesOutperformNeutral
Feb 2015JP MorganUpgradesUnderweightNeutral

View More Analyst Ratings for UIL
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Posted-In: Bank of America Brian ChinAnalyst Color Price Target Analyst Ratings


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