Morgan Stanley Expects ROE Policy Clarity for ITC Holdings Corp.

In a report published Wednesday, Morgan Stanley analyst Rajeev Lalwani reiterated an Overweight rating and $44.00 price target on

. In the report, Morgan Stanley noted, “The forum through which FERC addresses the ROE question remains unknown, but between both written orders and likely Commissioner statements, we believe investors will gain insight on the process for evaluating future rate and return issues. For the key New England ROE complaint case, using FERC precedent, we estimate the new base level to be ~10.5%, around 65bp below current figures. However, it is worth noting that a cut is not a given since in FERC's mid-2013 Initial Decision it noted a 6.1 to 13.2% range of reasonableness, which the above return is well within.” ITC Holdings Corp. closed on Tuesday at $36.74.