Although Citigroup's Brian Chin didn't have a lot of good to say in the near term about RRI Energy (NYSE:RRI), over the long term he does believe the company will perform better, and raised his rating on them from "Hold" to "Buy."
Chin said:
"We project forward capacity prices will move higher because of increasingly restrictive EPA policies for power plants. This will tighten power supply in the Pennsylvania/Jersey/Maryland region, causing capacity prices to rise over the next 2-3 auctions. Catalysts for our thesis: The EPA will finalize its SO2 and Hazardous Air Pollutants rules over the next 12-18 months. RRI Energy is the most levered name to this dynamic, because it has no regulated utility to dilute its earnings.
"We continue to be bearish forward natural gas prices, and RRI remains levered to natural gas prices. The annual capacity auction takes place in May 2011, and even our forecast expects capacity prices to be relatively flattish next year. Our RRI upgrade then, is clearly more of a long term call on our part."
RRI closed Monday at $3.55, gaining $0.03, or 0.85 percent. Citi has a price target of $5.50 on the company.
Showing posts with label Brian Chin. Show all posts
Showing posts with label Brian Chin. Show all posts
Tuesday, October 26, 2010
Friday, September 17, 2010
Citigroup (NYSE:C) Increases Calpine (NYSE:CPN) Price Target
Citigroup Inc. (NYSE:C) said they increased their price target on Calpine Corp. (NYSE:CPN), based on "higher EBITDA estimates."
In a research note, analyst Brian Chin said, "We are updating our adjusted EBITDA estimate for 10 and 11 to $1,787 and $1,811 million, from $1,462 and $1,694 million, respectively and introducing our $1,847 million 12 [adjusted] EBITDA estimate. The majority of our estimate increase is due to higher utilization assumptions, Connectiv and improved O&M assumptions. We marked our model to market as of 9/8/10."
The price target for the company, which owns and operate power generation plants, was raised from $16.50 to $18.00.
Citigroup added they're maintaining a "Buy" rating on the company.
In a research note, analyst Brian Chin said, "We are updating our adjusted EBITDA estimate for 10 and 11 to $1,787 and $1,811 million, from $1,462 and $1,694 million, respectively and introducing our $1,847 million 12 [adjusted] EBITDA estimate. The majority of our estimate increase is due to higher utilization assumptions, Connectiv and improved O&M assumptions. We marked our model to market as of 9/8/10."
The price target for the company, which owns and operate power generation plants, was raised from $16.50 to $18.00.
Citigroup added they're maintaining a "Buy" rating on the company.
Monday, September 13, 2010
Citigroup (NYSE:C) Increases Price Target on American Electric (NYSE:AEP)
American Electric Power Company, Inc. (NYSE:AEP) had their price target increased by Citigroup Inc. from $41 to $43 a share.
Earnings per share was downwardly revised from the prior outlook by Citi.
Citigroup analyst Brian Chin wrote in a note, "Our new 2010-12 EPS is $3.01/$3.22/$3.32 versus prior published $3.02/$3.25/$3.36. Our modest EPS outlook revision is attributed to updates to our model - mainly from slightly lower load growth versus prior forecasts. Our new EPS outlook still translates into a consolidated CAGR of 3.6% for the '09A-'12E timeframe - higher than the 1.2% CAGR the company generated in the '06A-'09A timeframe. Additionally, we are increasing our 12 month target price to $43 from $41 - solely attributed to the removal of our half year discount."
Cit said they're maintaining their "Buy" rating on American Electric.
Earnings per share was downwardly revised from the prior outlook by Citi.
Citigroup analyst Brian Chin wrote in a note, "Our new 2010-12 EPS is $3.01/$3.22/$3.32 versus prior published $3.02/$3.25/$3.36. Our modest EPS outlook revision is attributed to updates to our model - mainly from slightly lower load growth versus prior forecasts. Our new EPS outlook still translates into a consolidated CAGR of 3.6% for the '09A-'12E timeframe - higher than the 1.2% CAGR the company generated in the '06A-'09A timeframe. Additionally, we are increasing our 12 month target price to $43 from $41 - solely attributed to the removal of our half year discount."
Cit said they're maintaining their "Buy" rating on American Electric.
Wednesday, August 4, 2010
Citigroup (NYSE:C) Lowers Constellation Energy (NYSE:CEG) Earnings, Price Target
The price target of Constellation Energy Group (NYSE:CEG) was slashed by Citigroup (NYSE:C) from $36 a share to $34 a share, said Citi analysts in a note to clients. Earnings per share were also knocked down in range.
“We are lowering our EPS estimates to $3.40 and $2.46 from $3.42 and 2.88, respectively. Our adjustments stem from marking to market and higher interest expense than prior forecasts. Our EPS assumptions include a YOY retail drag of a similar size as the analysis included in this note (we have higher margins, but lower volumes)," said analyst Brian Chin.
Constellation just sold its California geothermal facility, Mammoth, to Ormat Technologies for $72.5 million. Constellation had a 50 percent stake in the project.
There were no specifics as to what the capital would be used for, other than strategic priorities.
“We are lowering our EPS estimates to $3.40 and $2.46 from $3.42 and 2.88, respectively. Our adjustments stem from marking to market and higher interest expense than prior forecasts. Our EPS assumptions include a YOY retail drag of a similar size as the analysis included in this note (we have higher margins, but lower volumes)," said analyst Brian Chin.
Constellation just sold its California geothermal facility, Mammoth, to Ormat Technologies for $72.5 million. Constellation had a 50 percent stake in the project.
There were no specifics as to what the capital would be used for, other than strategic priorities.
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