UPDATE: Wunderlich Securities Initiates Coverage on ALLETE with Buy Rating, $54 PT on Strong Rate Base and Organic Growth Prospects

In a report published Tuesday, Wunderlich Securities analyst Mike Bates initiated coverage on

with a Buy rating and $54.00 price target. In the report, Wunderlich Securities noted, “We are initiating coverage of ALLETE, Inc. (ALE) with a Buy rating and a $54 price target. The utility is poised to grow rate base by 40% through 2017 as it executes on its capital spending plan, positioning its generating fleet to comply with emissions benchmarks and renewable energy standards, and strengthening the regional grid with new transmission. The stock currently trades at 14.8x our 2015 EPS estimate, compared to slower-growing peers valued at 14.6x. We value the shares at $54, including $50 for the utility plus $4 for the unregulated businesses.” ALLETE closed on Monday at $48.77.