UPDATE: Wunderlich Securities Upgrades OGE Energy Corp. As Midstream Exposure Supports Valuation Upside

In a report published Monday, Wunderlich Securities analyst Mike Bates upgraded the rating on

from Hold to Buy, and raised the price target from $39.00 to $44.00. In the report, Wunderlich Securities noted, “We are upgrading OGE Energy (OGE) from Hold to Buy and raising our price target from $39 to $44. We recently hosted a series of investor meetings with senior management and are increasingly confident in OGE's prospects to outperform peers as investors more broadly recognize the likely acceleration of cash flow from Enable (ENBL - NR), which continues to expand in key energy plays and anticipates initial payment of IDRs (recall OGE owns 60% of the IDRs) by year-end 2015. We believe OGE's strong cash flow will comfortably support +10% annual dividend growth and fund significant rate base growth at the utility through 2019 without an external equity offering. Our $44 target includes $24 for the utility, $15 for ENBL LP units, and $5 for the GP IDRs.” OGE Energy Corp. closed on Friday at $37.13.