Many commentators and analysts believe the deal by Northeast Utilities (NYSE:NU) to merge with Northeast SuperRegional Transmission Co (NYSE:NST) may do well over the long term, but short term is expected to drag the company down.
UBS (NYSE:UBS) was the latest to reveal what they thought as they downgraded Northeast from "Buy" to "Neutral."
"We are downgrading NU following this morning’s announcement that the CT company plans to merge with Boston-based NStar, not covered) in an MOE. Management expects 9-12 months for receipt of all regulatory approvals. Shareholders are expected to vote on the transaction in 1Q11 (two-thirds needed for approval). NST management will have key financial roles, while NU management retains key operational ones," said UBS.
The market ignored the downgrade, as Northeast continued its upward climb, which has been done incrementally since March 2009, when they were trading under $20 a share.
Northeast Utilities closed Tuesday at $30.79 a share, gaining $0.37,or 1.22 percent. UBS has a price target of $33 on them.
Showing posts with label NSTAR. Show all posts
Showing posts with label NSTAR. Show all posts
Wednesday, October 20, 2010
Tuesday, October 19, 2010
Wells Fargo (NYSE:WFC), UBS (NYSE:UBS Downgrade Northeast Utilities (NYSE:NU)
Saying the $4.17 billion bid by Northeast Utilities (NYSE:NU) for NSTAR (NYSE:NST) is dilutive, Wells Fargo (NYSE:WFC) downgraded Northeast from "Outperform" to "Market Perform."
Also downgrading the utility was UBS (NYSE:UBS), which dropped them from a "Buy" to "Neutral."
Wells said, "While we understand and appreciate the strategic rationale for the merger with NSTAR, the deal appears to dilute two of the underlying reasons for our positive rating (above average EPS growth and high concentration of FERC earnings). Until we gain greater clarity on some of the issues surrounding the proposed transaction, such as MA regulatory risk, we are moving to the sidelines on NU."
Northeast closed Monday at $30.42, losing $0.28, or 0.91 percent. Wells has a range on them from $32 to $33 a share.
Also downgrading the utility was UBS (NYSE:UBS), which dropped them from a "Buy" to "Neutral."
Wells said, "While we understand and appreciate the strategic rationale for the merger with NSTAR, the deal appears to dilute two of the underlying reasons for our positive rating (above average EPS growth and high concentration of FERC earnings). Until we gain greater clarity on some of the issues surrounding the proposed transaction, such as MA regulatory risk, we are moving to the sidelines on NU."
Northeast closed Monday at $30.42, losing $0.28, or 0.91 percent. Wells has a range on them from $32 to $33 a share.
Friday, October 15, 2010
NSTAR (NYSE:NST) Should Be Low Through 2012
NSTAR (NYSE:NST), which serves the energy needs of Massachusetts, has a electric rate agreement in place through 2012, which should reduce regulatory risk for the energy company.
Consequently, while leaving their "Hold" rating in place, Jefferies raised their price target on NSTAR from $36.50 to $38 a share.
Jefferies said, "We view NSTAR as a well-managed, low-risk transmission and distribution utility with above-average dividend growth potential. An
electric rate agreement, implemented in 2006, should reduce regulatory risk through 2012."
NSTAR closed Thursday at $39.11, gaining $0.05, or 0.13 percent.
Consequently, while leaving their "Hold" rating in place, Jefferies raised their price target on NSTAR from $36.50 to $38 a share.
Jefferies said, "We view NSTAR as a well-managed, low-risk transmission and distribution utility with above-average dividend growth potential. An
electric rate agreement, implemented in 2006, should reduce regulatory risk through 2012."
NSTAR closed Thursday at $39.11, gaining $0.05, or 0.13 percent.
Subscribe to:
Posts (Atom)