Jefferies Reports El Paso Electric Upgraded To Buy

According to Jefferies, El Paso Electric Company EE is upgraded to Buy. Jefferies reported that El Paso Electric initiated a dividend policy, which should eliminate the P/E discount at which the stock has been trading. “We are upgrading El Paso Electric to Buy from Hold due to stronger than expected earnings power at the utility. Taking our 2013 EPS estimate of $2.65 in conjunction with a 12.5 P/E multiple, we arrive at a price target of $33.00 (up from $30.50). Based on yesterday's closing price of $28.97, our current price target represents a 12-month price appreciation and total return potential of 15.6% and 18.9%, respectively. The company instituted an $0.88 annual dividend, which equates to a 3.0% yield.” El Paso Electric Company closed yesterday at $28.97.