UPDATE: Deutsche Bank Initiates UIL Holdings at Hold; Earnings Confidence Priced In

Deutsche Bank initiated coverage on UIL Holdings

with a Hold rating and a $38.00 price target. Deutsche Bank commented, "We expect UIL to deliver EPS CAGR of 8% through 2015 driven primarily by the conversion of heating oil customers to natural gas. Despite above-average earnings growth, we are not expecting UIL to deliver any dividend growth over the next four years given a high current payout ratio (85%), above average leverage (62% debt-to-total cap), and negative free cash flow, which will likely require equity issuance. We see modest total return potential of about 1%, including a 4.4% dividend yield." UIL Holdings closed at $39.19 on Thursday.