Jefferies Reiterates Buy Rating on EnerNOC (ENOC)

Jefferies is out with a research report this morning, where it reiterates its Buy rating on EnerNOC Inc. ENOC; it has a $38.00 price target on the name. The Jefferies analysts cited the company’s recent earnings report, which was inline with estimates; the company also raised FY 2010 guidance. The analysts believe that the company’s guidance raise is quite reasonable. They also noted that ENOC has dispatched capacity to reduce load for over 100 demand response events YTD, with many of these occurring since June due to unusually warm weather. These events have accounted for “5x the amount of megawatts dispatched in the previous year, with performance exceeding 100% of contracted commitments.” DR events provide opportunities for modest upside from energy payments but also serve an important function for verifying the capacity provided by ENOC's network. As for valuation, the Jefferies analysts remarked, “We value ENOC based on 12.5x our CY2011 adjusted EBITDA estimate of $69M to arrive at a PT of $38. Our target multiple is in line with the smart grid peer group and is justified given ENOC's strength in the C&I demand response market and demonstrated execution.”