UBS Securities LLC on May 9 upgraded WEC Energy Group Inc. shares to "neutral" from"sell" and lifted its EPS estimates, citing the company's plans to capital expenditures for2016-2017 to offset the impact to earnings from bonus depreciation.

WEC estimates that it will receive approximately $1 billion incash tax benefits from the bonus depreciation extension, two-thirds of which willoccur in 2016 and 2017. Accelerated projects, according to the company, could includegas and electric distribution investments, safety and reliability spending, andthe development or purchase of gas storage facilities.

To reflect the higher CapEx, UBS now sees 2017 EPS at $3.13,up from $3.09, and 2018 EPS at $3.34, up from $3.30.

UBS also lifted its share price target to $58 from $53.

"We continue to apply a 5% premium to the peer P/E for highquality management and a favorable regulatory environment in Wisconsin," UBSanalyst Julien Dumoulin-Smith said. "While some concerns may remain over gasmain replacement execution in Illinois, we see WEC managing the risks effectively."