Pepco Shares Rise As Analyst Upgrades Stock

NEW YORK (AP) — Shares of Pepco Holdings Inc. climbed on Tuesday as an analyst upgraded the electricity and natural gas provider's stock, citing constructive regulatory environments, improved earnings transparency and reinvestment opportunities.

Pepco shares gained 52 cents, or 3.7 percent, to $14.62 in morning trading.

Credit Suisse analyst Dan Eggers upgraded Pepco to "Outperform" from "Neutral," and raised his price target for the stock to $16 from $13.

Eggers noted that Wall Street estimates for the company have finally reached a reasonable point.

"A major impediment for us has been the consistently too high Street consensus estimates, although these have come in recently and might even leave room for upside in out years," said Eggers.

Analysts polled by Thomson Reuters expect 2009 and 2010 earnings to reach $1.08 per share and $1.40 per share, on average, respectively. Eggers predicted earnings of 96 cents per share and $1.31 per share, respectively.