UPDATE: ISI Group Downgrades Consolidated Edison to Sell, Ups PT to $56

ISI Group lowers its rating on Consolidated Edison (NYSE: ED) to Sell from Hold on regulatory risks and raises its price target to $56 from $51.50 on valuation inputs.

ISI Group says, "Within the Regulated Subgroup we are focused on stocks that have upside potential given attractive dividend yields and positive potential catalysts. ED's dividend yield is in line with the peer group, and it trades at an 8% P/E multiple premium on '13 EPS assuming a stable ROE subsequent to its 2012 rate review at Con Ed of NY. We estimate a 50bp change in the authorized ROE would be $0.15-$0.20/share dilutive to earnings. Our estimates are slightly above consensus, assuming a stable ROE."

ED closed at $59.27 per share on Monday.