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Credit Suisse raises its rating on DTE Energy
DTE to Outperform from Neutral and raises its price target to $59 from $56 as it believes Michigan is a premium state offering constructive regulation that properly supports reinvestment into local economies that should translate into 5-6% EPS growth, plus a slightly better than group 4.6% dividend yield.
Credit Suisse says, "Visible 5-6% EPS Utility Growth. DTE issued a viable capital plan to meet reliability, environmental, pipeline safety, and state policy goals that will limit fully loaded customer rate increases to ~3% and result in 5-6% EPS growth. Also what is unique to DTE is the annual $300 MM Fermi Nuclear Station securitization expense will roll-off in late 2014 and result in direct savings to customers that in our eyes should alleviate some regulatory angst in approving capital projects given the additional rate headroom. DTE's stated equity needs are ~$300 MM annually met through its drip and dribble plans."
DTE closed at $51.44 per share on Friday.
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