AEE - Ameren upgraded at KeyBanc after Illinois 'regulatory noise'

2023-06-12 15:56:59 ET

Ameren ( NYSE: AEE ) is little changed after KeyBanc upgraded the stock to Overweight from Sector Weight with a $90 price target, saying the recent "regulatory noise" in Illinois has created an attractive entry point for investors, given the company's strong short-term and long-term fundamentals.

KeyBanc's Sophie Karp said Ameren ( AEE ) has lost some of its premium to the peer group since the start of the year, which he attributed to the unfavorable staff position on return on equity in the company's multi-year rate plan in Illinois.

The recent 8.9% ROE recommendation surprised to the downside, but Karp said she believes the outcome in the Illinois MYRP ultimately will be constructive.

Ameren ( AEE ) is growing earnings and ratebase at above peer average rates of 6%-8% and 8.4%, respectively, for 2023-27, which is underpinned by its $19.7B capex plan for the five-year period, the analyst said.

More on Ameren:

• Financial and valuation comparison to sector peers
• Analysis: Ameren: Might Make Sense To Accumulate This Stable, Growing Utility
• Stock price return: Down 5.5% YTD, down 2.5% in the past 12 months

For further details see: