Market Overview

Morgan Stanley Upgrades Ameren On Regulatory, Legislative Tailwinds

Morgan Stanley Upgrades Ameren On Regulatory, Legislative Tailwinds

Regulatory and legislative developments are working to the advantage of Ameren Corp (NYSE: AEE), according to Morgan Stanley.

The Analyst

Analyst Stephen Byrd upgraded shares of Ameren from Underweight to Equal-weight and increased the price target from $55 to $61, suggesting 6-percent upside.

The Thesis

Ameren is poised to report above-average 7-percent earnings per share growth through 2021, thanks to legislative and regulatory developments in Missouri that are panning out better than expected, Byrd said in a Wednesday note.

The analyst forecast further capex upside stemming from increasingly cheap wind power.

The company expects to invest $1 billion through 2023 to modernize the grid due to new legislation, the analyst said. 

With support for renewables in Missouri strengthening, Morgan Stanley sees potential for longer-term growth driven by incremental wind projects.

"We are now incorporating both $1 billion of grid modernization and $1 billion of renewables capex into our base case, driving 10 cents of incremental earnings by 2021 and $2/share of valuation," Byrd said. 

Incorporating the win of a 700-MW wind project in 2020, Morgan Stanley now estimates EPS of $3.45, roughly in line with the high end of the company's 5-7 percent EPS CAGR guidance for 2018-22. Morgan Stanley projects 7-percent-plus growth in 2021. 

The Price Action

Ameren shares have lost 2.7 percent year-to-date.

Related Links:

Utility NiSource Added To Goldman Sachs' America's Conviction Buy List: 'One Of Our Top Ideas'

Ameren 'Could Be Relatively Challenged From Tax Reform,' Says Morgan Stanley

Latest Ratings for AEE

Nov 2019MaintainsOutperform
Oct 2019UpgradesNeutralBuy
Oct 2019MaintainsHold

View More Analyst Ratings for AEE
View the Latest Analyst Ratings

Posted-In: Morgan Stanley Stephen ByrdAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (AEE)

View Comments and Join the Discussion!

Latest Ratings

WEEDCantor FitzgeraldMaintains18.9
TGTXCantor FitzgeraldMaintains19.0
SPLKCleveland ResearchDowngrades
IQVWolfe ResearchUpgrades
PRAHWolfe ResearchUpgrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Three Industries Already Using Self-Driving Vehicles

Yelp's 'Weakening' Engagement Prompts KeyBanc Downgrade