From Barclay's this morning:
We are downgrading POR to a 2-EW on valuation.
POR has outperformed the UTY by more than 6%
and 3% over the last three and six months,
respectively. In light of POR's newly issued '10
EPS guidance, we believe that continued
regulatory lag associated with A&G costs and
operational challenges will continue to cause POR
to earn below its allowed ROE of 10%.
Additionally, we see increased potential for higher capex in '10 and '11 and resulting needs for additional equity in '11 detailed below. POR
issued its 2010 EPS guidance of $1.50 - $1.65 v.
our $1.71E and consensus of $1.75. We are
revising our '10/'11 EPS estimates from
$1.71/$2.11 to $1.59/$1.82. We are lowering our
price target $1 to $20 premised on a combination
of '11E of $1.82 on an 11.1X group multiple,
discounted 5% for regulatory risk at a 50%
weighting, plus BVPS of $20.66 at a 50%
weighting.