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Williams Capital upgrades SCANA; BofA Merrill Lynch downgrades OGE

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Williams Capital upgrades SCANA; BofA Merrill Lynch downgrades OGE

Upgrades

* The Williams Capital Group on Nov. 26 upgraded its investment rating on SCANA Corp. to "hold" from "sell," and raised its target price to $49 from $30, after SCANA and its subsidiary South Carolina Electric & Gas Co. reached a $2 billion settlement to resolve a ratepayer lawsuit over cost recovery for the abandoned V.C. Summer nuclear expansion project.

"Our review of this settlement agreement, Dominion Energy Inc.'s revised rate plan of November 20, 2018, and the endorsement of South Carolina House Speaker Jay Lucas of Dominion's revised rate plan, leads us to believe that the probability at this point that the Dominion merger will be approved by the PSCSC has increased to the extent that a Sell rating on the stock is no longer warranted," analyst Christopher Ellinghaus wrote in a report.

* CreditSights on Dec. 3 upgraded Edison International parent debt and Southern California Edison Co. operating company debt to "outperform" from "market perform." According to the research firm, the financial metrics of the companies can "easily handle a $10 billion worst-case scenario from the 2017 and 2018 fires [versus] the consensus fire claim for both fires of [$6 billion to $8 billion]."

* CFRA Equity Research on Dec. 6 lifted its view on NiSource Inc. shares to "buy" from "hold," and raised its 12-month target price by $3 to $29.

"[NiSource]'s capital spending program, focusing on electric and gas distribution and transmission, will help to boost future EPS growth. Management believes that infrastructure enhancement opportunities could reach $1.8 billion annually, totaling about $30 billion over the next 20 years," analyst Christopher Muir wrote in a report.

Downgrade

* Bank of America Merrill Lynch on Nov. 27 downgraded OGE Energy Corp. to "neutral" from "buy," with a target price of $39.

Notable reiteration

* Mizuho Securities USA LLC, which has a "buy" rating on SCANA, raised its price target on Nov. 27 to $48.50 from $43 following the settlement announcement and based on the assumption that the merger will close by the end of the year.

* Guggenheim Securities LLC on Dec. 6 reiterated its "neutral" ratings on Avista Corp. and lowered its price target to $40 from $53, after Washington regulators rejected Hydro One Ltd.'s proposed $5.3 billion takeover of Avista.

"Our price target implies [approximately] 19% downside risk after dividend yield, but we maintain a Neutral rating based on our expectation of future M&A activity," analyst Shahriar Pourreza wrote in a note to investors.