On Jul 5, 2013, we upgraded our recommendation on
Integrys Energy Inc.
) to Outperform from Neutral based on high-quality acquisitions
and investments in the lucrative compressed natural gas ("CNG")
market. The diversified energy holding company currently holds a
Zacks Rank #1 (Strong Buy).
Why the Upgrade?
The primary drivers include the company's diligent efforts to
promote its sales and marketing business. We believe Integrys
Energy's persistent focus on this segment will help counter
The company is well positioned to witness favorable earnings
yet again in the upcoming quarter following a solid first quarter
performance, which beat our expectation.
The successful completion of the Fox Energy Center acquisition
is expected to be another catalyst for Integrys Energy's future
growth. This endeavor will complement its long-term utility
contract win from the Chicago government and help spur
Of late, Integrys Energy has been branching out its operations
to enhance its revenue stream. The company in a move to make the
most of rising fuel demand, owing to increased truck activities,
announced plans to add CNG fuel stations across 29 states in the
U.S. Moreover, its emphasis on rate-based investments for the
next three years will enable Integrys Energy to offer consistent
high-quality services to its customer.
We believe these factors will allow the company to achieve its
increased earnings goal of $3.25-$3.60 per share for 2013 from
the prior range of $3.05-$3.55 per share.
The expected long-term earnings growth rate for Integrys
Energy is set at 5%. The Zacks Consensus Estimate for 2013
represents projected year-over-year growth of 5.4% to $3.44 per
share from $3.26 in 2012.
Other Stocks to Consider
Other utility operators looking good at the moment are Zacks
Ranked #2 (Buy)
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INTEGRYS ENERGY (TEG): Free Stock Analysis
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