UPDATE: Deutsche Bank Upgrades ITC Holdings on Reasons for Caution

In a report published Wednesday, Deutsche Bank analyst Jonathan Arnold upgraded the rating on

from Hold to Buy, and raised the price target from $95.00 to $104.00. In the report, Deutsche Bank noted, “With utilities set to finish the year last among sectors for the second straight year, it is surely tempting to argue for a rebound in 2014. But with the Fed exit still in front of us and a continuing overhang from challenging power business fundamentals, investors have plenty of reason to proceed with caution. Compared to April when Fed taper talk began, utilities are at least much better relative value (P/E parity vs. ~20% premium) and closer to their lows in terms of mutual fund positioning. A market growth stall might be utilities' best hope for a winning 2014; in the meantime, we continue to counsel selectivity, mostly favoring better growth or value catalysts over pure defensiveness and yield.” ITC Holdings Corp. closed on Tuesday at $93.30.