UIL Holdings' Shares Jump On Upgrade

NEW YORK (AP) — Shares of UIL Holdings Corp. jumped Wednesday after an analyst upgraded the stock, citing an expected boost in both share price and profit.

UIL shares gained 87 cents, or 4 percent, to $22.88 in Wednesday midday trading.

Baird analyst David Parker said that since February's disappointing regulatory ruling for UIL, its stock price has fallen too far. In February, the Connecticut Department of Public Utility Control authorized a return on equity of 8.75 percent, the lowest in the industry, and UIL's stock has shed 20 percent of its value since then.

Parker called the subsequent stock drop a "market overreaction" and pointed to the company's expected "solid" profit growth as reason to buy up shares. He expects the average annual earnings per share to climb between 5 percent and 7 percent, due to rate relief, transmission and distribution investments and new generation.

Parker upgraded the company to "Outperform" from "Neutral" and set a 12-month price target of $30. He estimated a 2009 earnings of $1.95 per share.