- Credit Suisse analyst Nicholas Campanella reiterated a Neutral rating on the shares of Portland General Electric Company POR and raised the price target from $46 to $48.
- The analyst provides a preview for POR where the analyst expects POR to give FY23 EPS guidance and reaffirm the new 5-7% LT EPS growth rate.
- The quarter setup is cautious to the analyst, given the EPS dynamic and power cost pressures impacting 4Q & FY22.
- Recall FY22 is also the base of the 5-7% EPS CAGR introduced on the 3Q call, and the analyst now sees POR potentially below the range.
- The company recently raised $500 million of common equity and refreshed its 5-7% EPS CAGR, which management has a line of sight to over the long term, with 2023 being an investment year, the analyst noted.
- The analyst still sees LT EPS below the current CAGR, but two key catalysts for '23 which should help POR's growth are the rate case and the pending RFP award.
- Given renewable supply chain issues, the analyst expects little detail on the 4Q call regarding the RFP.
- POR still likely has a 3GW+ rate base renewable opportunity over the LT, with additional clarity coming in FY23 view an IRP refresh in the analyst's view.
- The Clearwater wind asset is the only announced ($415Mn) capital opportunity to date for the current '21 All-source RFP, with the prospects for an additional battery likely to materialize in the current procurement, said the analyst.
- The analyst added that negotiation with bidders on the final shortlist is considering impacts from the inflation reduction act, among other items.
- The opportunity remains outside the analyst's CapEx expectations but could put POR within the 5-7% EPS glide path in '24/'25.
- The analyst expects management to reiterate this view along with the current 5YR $4.2Bn capital plan on the 4Q call, with the LT financing plan also unchanged.
- Price Action: POR shares are trading higher by 0.54% at $46.75 on the last check Monday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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