2023-06-06 14:58:02 ET
DTE Energy ( NYSE: DTE ), NiSource ( NYSE: NI ) and CMS Energy ( NYSE: CMS ) were upgraded Tuesday to Buy from Neutral at UBS, which advocates a narrow exposure to utilities and recommends slowly building positions based on the potential for sustained growth from the IRA-driven capital cycle.
UBS said DTE Energy ( DTE ) has overly discounted a weak outcome in the last Michigan rate case in a jurisdiction that still places the utility in the top quartile for regulatory ranking.
NiSource ( NI ) has several catalysts upcoming with the sale of the NIPSCO minority interest and a potential for a positive capex revision around renewable generation projects; the bank also likes the continued focus on cost management, and a steep decline in natural gas prices YTD will help minimize bill pressure to customers.
Public Service Enterprise Group ( PEG ) is rated Buy as a low-risk company that does not have material rate case risk in 2023, and UBS believes the GSMP III outcome could push the stock higher within the 6%-7.5% rate base growth range.
Among regulated utilities, UBS also rates Exelon ( EXC ) and Sempra ( SRE ) at Buy, while downgrading American Electric Power ( AEP ) and CenterPoint Energy ( CNP ) to Neutral from Buy.
More on DTE Energy:
- Financial and valuation comparison to sector peers
- Analysis: DTE Energy: Grid Modernization Creating Margin Expansion
- Stock price return: Down 6.5% YTD, down 17% in the past 12 months
For further details see:
DTE Energy, NiSource, CMS Energy raised to Buy at UBS