Wunderlich Maintains Its Buy Rating, Estimates Ahead Of Calpine Corp's. Earnings Report

Calpine Corporation CPN is expected to report 4Q earnings on Friday. Wunderlich is expecting 4Q adjusted EBITDA of $366 million, down from $408 million a year ago. The results will be led by lower power prices relative to a year ago. It expects investor focus will be on CPN's Texas region and potential financial impacts from the cold weather and spike in power prices in early February. Further, with concern about PJM capacity prices in the May auction, we expect investors will be focused on CPN's auction outlook. Separately, CPN recently completed asset sales and refinancings, and has continued to improve its financial flexibility. Oppenheimer maintains its Buy rating and $16 price target on CPN. Wunderlich expects 4Q adjusted EBITDA of $366 million, which suggests 2010 adjusted EBITDA of $1.692 billion versus $1.782B in 2009. Wunderlich expects operating costs continued to decline in 4Q. CPN closed Wednesday at $14.43