ESE, ELT And PWR Highlighted In Deutsche Bank's Utility Capex Analysis

Key takeaways from Deutsche Bank's study of over 90 utilities (representing $63B in annual capex) include: 1) The overall capex outlook for 2011 has improved (+5% Y/Y vs +1% last quarter). 2) The outlook for transmission spending remains largely unchanged (despite some high-profile push-outs). 3) Smart grid momentum has slowed. “With solid visibility and limited downside risk to the valuation multiple, ESCO ESE and Elster ELT should outperform peers in 2011,” Deutsche Bank writes. “We like Quanta Services Inc. PWR for longer-term oriented investors, but are cautious that estimates are still too high.” ESCO currently trades at $36.61; Elster trades at $16; and Quanta Services trades at $17.44.