UPDATE: Deutsche Bank Initiates Coverage on NRG Yield with Hold Rating, $29 PT Ahead of Forecast Dividend Increase

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In a report published Monday, Deutsche Bank analyst Keith Stanley, CFA initiated coverage on
NRG YieldNYLD
with a Hold rating and $29.00 price target. In the report, Deutsche Bank noted, “We are initiating coverage of NRG Yield (NYLD) with a Hold rating. We forecast a 50% increase in dividends per share to $1.80 by 2016, driven by final completion of the CVSR solar project and the acquisition of several of the ROFO assets. We see visibility on growth as above-average based on the ROFO agreement with NRG, a low-risk, contracted asset base, and assuming NYLD's cost of capital remains relatively low. However, this growth seems fairly priced as NYLD currently trades at a premium to the broader MLP group (which we see as the most appropriate comparable), and more or less in line with a sub-grouping of MLPs with faster growth and/or less commodity risk.” NRG Yield closed on Friday at $28.37.
Posted In: Analyst ColorInitiationAnalyst RatingsDeutsche BankKeith Stanley
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