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Analyst Actions: CenterPoint Energy Ests Revised at Credit Suisse After Q4

4Q EPS Beat: Reported adjusted EPS of $0.26 was better than our $0.22 forecast. The positive variance to our forecast was driven primarily by a lower than expected tax rate during the quarter (+$0.04/sh).

Difficult Comps in 2012; Ratable Growth Ahead: CNP issued 2012 EPS guidance of $1.08-$1.20/sh, below our previous estimate of $1.22/sh. Do note, CNP's guidance does not fully reflect the deployment of $1.7b of true-up proceeds. CNP noted it faces difficult comparables in 2012 over 2011 owing to record heat experienced in summer 2011 and headwinds from weak natural gas prices. That said, CNP's ratable growth remains on track. The company plans to grow its regulated assets in the mid-single digit range with stronger growth out of its field services segment.

MLP Is a Viable Option to Finance Growth: In our view, CNP's creation of a MLP to finance its field services growth is an increasing likelihood in light of management's commentary on the conference call. Management stated the decision to create a MLP would depend on the visibility around long-term growth opportunities for its midstream business. In our view, CNP's field services segment has established a solid foothold and is positioned to sustain mid to high single digit growth longer term.

Tweaking Estimates and Reiterate Outperform: Following results, we reiterate our Outperform rating as we believe the company offers relatively stable cash flows and the potential for above average growth driven by its midstream operations. Our $21 TP implies a 14.3x P/E multiple on our 2012 EPS est. and adds $4/share of value from CNP's true-up settlement. We are revising our 2012/2013/2014 EPS estimates to $1.19/$1.40/$1.48 (from $1.22/$1.31/$1.41).

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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