Exposure In New Mexico Is To PNM's Benefit

PNM Resources (NYSE: PNM) is believed to have expensive shares according to Jefferies, which are based on the company's earnings potential from its association and exposure in New Mexico.In the report, Jefferies writes "Key drivers include rate relief effective July 1, 2009 and April 1, 2010 ($0.07 per share), and weather and load growth ($0.04), partly offset by higher pension, property tax, interest and other costs ($0.04). Weather normalized retail sales increased 2.1%, led by 2.6% sales growth by residential customers. Customer growth during the quarter was up roughly 0.5%. PSNM filed an electric rate case June 1, 2010 and had previously filed a renewable plan in January 2010. PNM is requesting a $165.2 million (22%) annual increase in its electric rate case. It is requesting a forward test year in the case and intervenor parties had claimed that PNM's filing was incomplete under NMPRC Rule 530. On July 27, 2010 the NMPRC issued an order delaying a final decision in the company's rate case until at least June 5. Intervenor testimony is scheduled for December 17, 2010 and hearings on January 31, 2011. PNM is also in discussion with intervenor parties to settle the case."Jefferies maintains its Underperform rating and $10 price target.PNM Resources closed Friday at $11.79.