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Morgan Stanley Upgrades Regulated Utilities Sector; Dynegy Is Top Pick, Laclede, Pinnacle West Downgraded

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In a new report, Morgan Stanley analyst Stephen Byrd upgraded the Regulated Utilities industry from Cautious to In-Line.

“For 2016, we are focused on utilities with above-average EPS growth driven by strong infrastructure spend, as well as select merchant power stocks with very strong cash flow profiles,” Byrd explains.

Byrd believes that the market continues to undervalue growth and believes it will better differentiate high-growth names from others in 2016. In addition, he predicts that the valuation gap between undervalued public companies and overvalued private companies will begin to close.

Related Link: Deutsche Bank Says $55 Oil Predicted Weeks Ago Now Seems Unreasonable

Morgan Stanley names Dynergy Inc. (NYSE: DYN) its top overall pick in the space, but also remains Overweight on NRG Energy Inc (NYSE: NRG) and Calpine Corporation (NYSE: CPN). The firm maintains its Underweight rating on Consolidated Edison, Inc. (NYSE: ED), Southern Co (NYSE: SO) and Public Service Enterprise Group Inc. (NYSE: PEG).

In addition, Morgan Stanley has downgraded Laclede Group Inc (NYSE: LG) and Pinnacle West Capital Corporation (NYSE: PNW) from Equal-Weight to Underweight.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for DYN

DateFirmActionFromTo
Oct 2020JP MorganInitiates Coverage OnOverweight
Oct 2020StifelInitiates Coverage OnBuy
Oct 2020JefferiesInitiates Coverage OnBuy

View More Analyst Ratings for DYN
View the Latest Analyst Ratings

 

Related Articles (NRG + DYN)

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