UPDATE: BMO Capital Markets Reiterates Market Perform Rating, Raises PT on Black Hills Corp.

In a report published Monday, BMO Capital Markets reiterated its Market Perform rating on Black Hills Corp. (NYSE: BKH), and raised its price target from $35.00 to $42.00.BMO Capital Markets noted, “BKH reaffirmed its 2013 EPS target of $2.20-$2.40. Key drivers for 2013 include rate relief, lower coal expenses, and lower interest expense (use of $227 million proceeds from 3Q12 Williston Basin asset sale) partially offset by the loss of earnings from the divested assets. New equity needs for 2013 are limited to ~$3 million (DRIP). BKH expects to prove out (acreage, well design, spacing) its Mancos shale natural gas properties over the next two years and to consider alternatives for optimizing these assets thereafter. We do not believe a decision will be made until late 2013 or more likely 2014. All approvals have been received for the ~$237 million Cheyenne Prairie generating station; construction is slated to begin in spring 2013.”Black HIlls Corp. closed on Friday at $40.88.