UPDATE: D.A. Davidson Reiterates Neutral Rating, Raises PT on Avista Corp. Following 1Q13 EPS

In a report published Thursday, D.A. Davidson analyst Michael Bates reiterated a Neutral rating on Avista Corp.

, and raised the price target from $26.00 to $28.00. In the report, Bates noted, “Avista Corp. reported 1Q'13 EPS of $0.71, up from $0.65 a year ago. We were forecasting $0.73 and the Street consensus was $0.69. While revenues exceeded our expectations, operating costs expanded more than we had modeled. Consolidated EPS guidance was maintained at $1.70-$1.90, and assumes normalized precipitation, temperatures, and hydroelectric generation for the remainder of 2013. General rate increases drove a $7.1 million rise in gross margin. A pretax benefit of $3.1 million related to the ERM in Washington was recorded in 1Q'13, and AVA currently expects to finish the year with the mechanism in a benefit position. Coupled with the benefit of a shared settlement with BPA, we are increasing our earnings forecast to the upper half of the segment's $1.64-$1.78 guidance range.” Avista Corp. closed on Wednesday at $28.03.