Wells Fargo Raises PNM Valuation Range To $12.50 to $13.50

After scrubbing its model, Wells Fargo said that it is increasing its 2011 and 2012 EPS estimates on shares of PNM Resources, Inc. PNM. “Our 2011E improves to $0.67 from $0.62 and our 2012E increases to $1.12 from $1.08,” Wells Fargo writes. “The revisions reflect the TNMP rate case stipulation (filed on Dec. 10), which was slightly better than we expected, and various other slight tweaks to our model. “Reflecting both our higher 2012E and an increase in peer multiples, we are raising our V.R. to $12.50- 13.50 from $11.50-12.50. At the midpoint of our range, PNM would trade at ~11.6x our 2012E, representing a 9-10% discount to the median 2012 P/E of its small cap peers. Given that our 2012E is heavily dependent on our assumed outcome in PNM Electric's rate case, we continue to think this level of discount is warranted.” PNM Resources currently trades at $13.54.