Wunderlich Securities Reduces EPS Estimates On Constellation Energy, Maintains Hold (CEG, EXC)

Wunderlich Securities lowered its 2011 earnings per share estimates on Constellation Energy CEG after worse than expected Q1 results. Wunderlich raised its earnings per share estimates for the next two year, however, leaving its rating unchanged at Hold. Wunderlich stressed ongoing merger with Exelon EXC as a reason for its decision. In the report, Wunderlich states, "Constellation Energy (CEG) reported 1Q adjusted EPS of $0.76 versus $1.43 a year ago and our estimate of $1.07. The lower-than-expected results were driven by lower retail margins and generation earnings. The quarter was negatively impacted by $0.14 as a result of the early February cold snap in Texas. The quarter also included a $0.05 impact from contract obligations resulting from previously divested assets. CEG maintained 2011 and 2012 EPS guidance of $3.10-$3.40 and $2.40-$2.70. We are reducing our 2011 EPS estimate to $3.15, but increasing our 2012 and 2013 estimates to $2.50 and $3.10. We continue to have a Hold rating on CEG, in light of the pending merger with Exelon Corp. (EXC-NR)." Wunderlich currently has a price target of $39 on Constellation. In today's trading, its shares lost 0.75% and are currently trading at $35.72.