JP Morgan Is Downgrading Portland General On Future Growth, Cash Return

In a report published Tuesday, analysts at JP Morgan downgraded

from Overweight to Neutral. The price target was lowered from $40 to $36. The company was also removed from JP Morgan's Analyst Focus List. The company's recently announced growth plans and cash return for the future were short of the analysts' expectations. While the stock is relatively inexpensive at present, the lack of visibility into Portland General Electric's growth and cash return limits any near-term upside. The company announced a 7 percent increase in its dividend payout, while guiding to a dividend growth rate of 57 percent going forward. According to the analysts, this growth rate could prove to be conservative and "risks a period of inefficient balance sheet usage given the still very low payout, while any incremental spending could add only limited shareholder value in the Oregon rate construct." JP Morgan considers Portland General Electric "as among 11 regulated utilities with uncertain accretion potential in a high spending cycle as costs of capital rise at faster rate than authorized returns."