Pritchard Equity Research Lowers Rating On EnerNoc To Neutral, Keeps Price Target (ENOC)

Pritchard Equity Research is lowering its rating on EnerNoc, Inc ENOC to Neutral after the company reported Q2 earnings yesterday. In the report, Pritchard Equity writes, "We believe weakness in the small commercial and industrial (C&I) customer base in eastern PJM will likely result in a pause in the shares' recent strength. Our $36 price target is unchanged. We have lowered our rating to ‘Neutral’ from ‘Buy’. Our $36 price target (unchanged) continues to be based on an Enterprise Value (EV) to EBITDA valuation methodology. We use a multiple of 13x our 2012 estimated EBITDA of $58.5 million. This multiple represents approximately a 10% premium to our Smart Grid Peer Group. We believe the premium is justified given the higher growth rate of the relatively young DR market, versus the traditional meter replacement business that is a material portion of earnings for some of the peers. As the shares now trade in-line with our price target, our rating is ‘Neutral’." Shares of EnerNoc are currently trading at $35.14, down $1.39 on the day.