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Utilities outpace markets, touch 52-week highs as Q1 earnings season winds down

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


Utilities outpace markets, touch 52-week highs as Q1 earnings season winds down

Withfirst-quarter 2016 earnings season winding down, electric utility and powerproducer stocks hit 52-week highs during the week of May 2.

TheDow Jones Utility Average and the Philadelphia Utility index rose during the openingdays of the month, while the yield on the 10-year Treasury note declined from1.88% on May 2 to 1.76% on May 5, according to SNL Energy data.

Utility stocks in general outperformedduring the first quarter despite mixedconcerns about the sector's outlook.

's stock hita 52-week high of $73.25 on May 5, weathering a first-quarter on lower resultsat Southern California Edison Co.Edison, however, reaffirmed 2016 core earnings guidance of $3.81 per share to$4.01 per share.

JefferiesLLC on May 3 raised its price target on Edison shares to $72 from $66, whilemaintaining a "hold" rating.

"Wefind Edison International to be fair value at current levels trading a slightpremium with other regulated [transmission and distribution] names,"Jefferies analyst Anthony Crowdell wrote.

"Managementhighlighted that they have been able to navigate rate increases while at thesame time upgrading the electric grid as the state transitions to morerenewable forms of generation," Crowdell wrote, noting that the companyreaffirmed its $4 billion annual capital expenditures plan.

GuggenheimSecurities LLC analyst Shahriar Pourreza wrote in a May 2 report that EdisonInternational is a "solid story with growth and attractive runway fordividend growth," and has strong management, but maintained a "neutral"rating while waiting for a "better entry point."

shares hit $33.20 on May 4, the day of the company's call.

Meanwhile,NextEra Energy Inc.,the company trying toacquire Hawaiian Electric, saw a 52-week high of $120.44 on May 4before closing at $118.85 on May 5.

S&PCapital IQ upgradedNextEra shares to "hold" from "sell" on April 28, the sameday the company reported a year-over-year increase in first-quarter earnings and beat the firm'sconsensus estimate.

"Strongperformance was driven by new renewable and gas pipeline investment, as well ascontinued regulated utility investment at [Florida Power & Light Co.]," Pourreza wrote inan April 28 report, adding "management stopped short of raising guidancegiven the midst of a rate case."

's stock hit a high of$38.78 on May 5. First-quarter earnings were dragged down by mild weather and its U.K. businesssegment.

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PPL,however, said it continues to target2016 EPS from ongoing operations of $2.25 to $2.45 and GAAP EPS of $2.29 to $2.49.

"Webelieve PPL is undervalued based on its UK subsidiary trading at a 10% discountto our 2018 group average P/E multiple for regulated utilities," Crowdellwrote in an April 29 report. Jefferieshas a "buy" rating on PPL shares.

SNLEnergy data shows PortlandGeneral Electric Co., CenterPointEnergy Inc. and OtterTail Corp. all hit 52-week highs May 5 of $41.76, $21.89 and $31.15,respectively. The same day, ALLETEInc. recorded a high of $58.49 before closing at $57.69.

's stock hit $42.17with Black Hills Corp.and DTE Energy Co.recording highs of $62.26 and $92.32, respectively, on May 5.

Guggenheimhas a "buy" rating on DTE, whose stock hit a high more than a weekafter the company reported a dropin its first-quarter 2016 operating earnings as revenues narrowed year overyear. Guggenheim said the company has "solid growth and sound regulatory construct," whilenoting that a comprehensive energypolicy in Michigan is a "nice ask but not crucial to ourthesis."

'sstock price of $33.77 on May 4 and ElPaso Electric Co.'s $46.79 mark on May 5 were both 52-weekmilestones.

hit its52-week high of $44.68 on May 2, closing at $44.22 on May 5, while observed a highof $60.51 on May 4 and closed at $59.97 the next day.

WECexecutives said May 3 that the company plansto accelerate its CapEx program for 2016 and 2017 as a result ofthe bonus depreciationtax break extension.

posted a22.8% year-over-year increasein first-quarter adjusted EBITDA, the company announced in a May 4 newsrelease. Ormat shares hit a 52-week high of $45.13 the next day.

SNL Energy is an offering ofS&P Global Market Intelligence, which together with S&P Capital IQ isowned by S&P Global Inc.