UPDATE: ISI Group Upgrades PPL Corporation to Buy, Reiterates $32 PT

In a report published Monday, ISI Group upgraded its rating on PPL Corporation

from Neutral to Buy, and reiterated its $32.00 price target. ISI Group noted, “In conjunction with ISI's adoption of a standard ratings system for stocks, we are upgrading shares of PPL Corp from Neutral (Hold) to Buy, retaining our $32 target. Our'12-'15 EPS estimates remain unchanged at 2.35/2.40/2.20/2.30. We estimate 12-month total return prospects of 14.6%. Recent resolution of Kentucky and Pennsylvania rate cases support our earnings outlook at those businesses through ‘14. PPL will likely make a filing in PA later this month to apply for a DSIC mechanism, which will allow for more contemporaneous returns on a portion of capital invested in the PA electric distribution system. A PUC order is expected in April with the mechanism effective by mid-year. We expect earned ROEs at the KY and PA utilities to modestly lag their authorized levels for the next several years given the high level of capex, but expect double digit rate base growth from '12-'15, and assume the ROEs improve after the capex cycle slows post-2014.” PPL Corporation closed on Friday at $29.21.