UPDATE: Citi Upgrades Public Service Enterprise Group to Buy

Citi is out with its report today on Public Service Enterprise Group PEG, upgrading PEG to Buy from Hold. In its report, Citi writes, "We are upgrading due to 1) EPAdriven power supply tightening should boost energy and capacity prices in PJM, 2) PSE&G's balance sheet is sufficiently strong to open capital deployment options, 3) shares are overly discounting NJ attempts to subsidize power investments, 4) absolute and relative valuations are compelling, and 5) PEG's dividend yield, like other electric utilities' yields is becoming attractive in a period of low bond yields." Citi raises its PT on PEG to $37 from $31. Shares of PEG closed Friday at $31.62, down 1.28% from Thursday's close.