Jefferies Analyst Upgrades PPL Corp, Says 'I'm Backing Britain'

In a report published Monday, Jefferies analyst Anthony C. Crowdell upgraded the rating on

from Hold to Buy, while lowering the price target from $34.50 to $34.00, following the recent spinoff of the company's unregulated business, as well as the higher than average rate base growth. With the stock trading at a discount to its regulated peers, the analyst believes that it offers a good entry point for investors, adding that investors would gain one of the highest yield in the sector while they wait for the share price to appreciate. "PPL is now a fully regulated T&D utility with no commodity exposure following its spin-off of Talen Energy on June 1. The spinoff leaves PPL Corp with 4 regulated transmission and distribution subsidiaries in the US and UK. We believe the spinoff allows for PPL Corp. to be valued as a pure play regulated utility with a group average multiple," Crowdell explained. In addition, the adverse impact of the company's exposure to the British pound sterling also appears to be easing. The company intends to repatriate an estimated $310 million this year and another $500 million in 2016 and 2017. The analyst also expressed optimism regarding PPL Corp's ability to grow earnings.