On Jan 8, Zacks Investment Research downgraded
Wisconsin Energy Corporation
) to a Zacks Rank #2 (Buy).
AES CORP (AES): Free Stock Analysis Report
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WESTAR ENERGY (WR): Free Stock Analysis
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Why the Downgrade?
Wisconsin Energy Corporation has been witnessing rising earnings
estimates on the back of consistently strong performance.
Moreover, this utility service provider reported positive
earnings surprises in the last 4 quarters with an average beat of
7.43%. The long-term expected earnings growth rate for this stock
Wisconsin Energy has a systematic capital expenditure policy to
upgrade and strengthen its existing infrastructure. Recently, the
company released a plan to invest between $3.2 billion and $3.5
billion over the period 2014 through 2018 of which $0.71 billion
will be invested in 2014.
The financial strength also allowed the company to approve of a
share repurchase plan of $0.3 billion from the open market from
2014 through 2017. In addition, the company intends to lower its
outstanding debt by $0.5 billion over the above mentioned period.
The positive attributes mentioned above did not evoke any upward
movement in Wisconsin Energy's earnings estimates over the last
90 days. The earnings estimates for 2013 and 2014 remained
unchanged over the aforesaid period, which prompted us to lower
the rank by a notch.
Recently, We Energies, a Wisconsin Energy utility, and Wolverine
Power Cooperative decided to discontinue their joint venture
agreement to install state-of-the-art emission control equipment
in a coal-fired power plant, citing changes in business
conditions in Michigan. This joint venture would have definitely
benefited Wisconsin Energy and the annulment is likely to impact
its long-term development goal.
Other Stocks to Consider
Other players in the electric utility industry, which look
attractive at current levels, include
NRG Yield, Inc.
Westar Energy, Inc.
The AES Corporation
). NRG Yield, Inc. and Westar Energy Inc. hold a Zacks Rank #1
(Strong Buy) while AES Corporation carries a Zacks Rank #2