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Macquarie downgrades NextEra Energy; Morgan Stanley resumes Exelon coverage

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WunderlichSecurities Inc. on April 7 transferred coverage of Spark Energy Inc. and upgraded its stock to "buy"from "hold." The brokerage also raised its price target on the companyto $22 from $20.

"Thefirm's scalable business model and experienced management team position it wellfor future growth as it continues to execute its customer acquisition program, inour view. With improving operating margins, consistent free cash flow, and a dividendyield of about 7.5%, we rate [Spark Energy] shares a Buy," analyst Liam Burkesaid in an investor note.

Wunderlichalso lowered full-year EPS estimates to $1.58 from $1.70 for 2016, and to $1.72from $2.29 for 2017.

Downgrades

MacquarieCapital (USA) Inc. on April 4 downgradedNextEra Energy Inc. to"neutral" from "outperform."

"Werecognize [NextEra Energy]'s strong M&A track record, but given []'slarge pending rate case and the exceptional performance of [NextEra Energy]'s stockover the last five years, we prefer to move to the sidelines," Macquarie Capital(USA) analyst Angie Storozynski said in a note to investors.


MacquarieCapital (USA) Inc. on April 4 downgradedCMS Energy Corp. to "neutral"from "outperform" based on less attractive valuation. Although the brokeragehas a positive view of the company's performance and regulatory and political relationshipsin Michigan, Macquarie Capital said it has become more selective after the strongyear-to-date outperformance for regulated utility stocks.

Coverage resumption

MorganStanley on April 6 resumed coverage of ExelonCorp. at "equal-weight" and with a $38 price target.

"Wesee modest upside to our price target and view the closing of the [] deal as a positivefor [Exelon] shareholders. However, we are below consensus in 2018 due to lowermerchant earnings," the firm said in an investor note.

Notable reiterations

JefferiesLLC on April 11 raised the price target for "buy"-rated to $40.50 from $36, assumingFERC will approve the company's power purchase agreement. The Public Utilities Commissionof Ohio approved the PPAon March 31.

"Webelieve the current stock price assigns no probability to FERC approval and assumesa $2 billion equity issuance to shore up the balance sheet. We anticipate FERC approvalin April/May and assigning a 60% probability weighted price target arrive at a $40.50value for [FirstEnergy]," analyst Anthony Crowdell said.


JefferiesLLC on April 11 maintained its "hold" rating on Entergy Corp. but raised the price target to $82.50 from$75.50.

Crowdellnoted that Entergy's shares are fairly valued, saying, "While the company isexpecting grid upgrades, asset replacement, and industrial load growth to driveearnings, we believe those expectations are already built into the stock price."