We have maintained our Neutral recommendation on a utility
). The company currently has a Zacks Rank #3 (Hold).
Why the Reiteration?
In the first quarter of 2013, PPL Corporation's earnings per
share were in line with the Zacks Consensus Estimate and
surpassed the year-ago level primarily due to strong performance
from the Kentucky Regulated, U.K. Regulated and Pennsylvania
PPL Corporation has strong financial position with cash balance
of $853 million as of Mar 31, 2013 and availability of $4.7
billion under the total domestic credit facilities. This profile
enables the company to follow steady organic and inorganic growth
As far as organic ventures are concerned, PPL Corporation's unit
PPL Electric Utilities intends to invest around $1 billion to
upgrade its transmission and distribution systems as announced in
Feb 2013. This initiative will help the company to provide
uninterrupted services to its customers. In addition, the company
also has a strong project pipeline, including ventures to
minimize duration and size of outages.
On the inorganic front, PPL Corporation recently completed a
number of acquisitions, including AES Ironwood, L.L.C and AES
Prescott, L.L.C. These acquisitions, which are providing the
company an operational control of additional combined-cycle gas
generation, will subsequently improve its position by expanding
the proportionate size of the regulated business.
However, we are concerned about the risks associated with the
delay and cancellation of several important projects, and impacts
of stringent regulations, which may to some extent, impede the
company's future growth.
Other Stocks to Consider
The other stocks in the industry that are worth considering
CPFL Energia S.A.
Companhia Paranaense de Energia
) with a Zacks Rank #1 (Strong Buy), and
) with a Zacks Rank #2 (Buy).
ALLETE INC (ALE): Free Stock Analysis Report
CPFL ENERGI-ADR (CPL): Get Free Report
COPEL-ADR PR B (ELP): Free Stock Analysis
PPL CORP (PPL): Free Stock Analysis Report
To read this article on Zacks.com click here.