Integrys Cut To 'Neutral' On Stock Appreciation

NEW YORK (AP) — Shares of Integrys Energy Group Inc. have appreciated significantly and have reached a fair value, said an analyst Monday as he lowered his rating for the utility company.

Since reaching a 52-week low in early March, Integrys shares have soared more than 80 percent to close at $36.29 on Friday. In Monday midday trading, shares fell 40 cents to $35.89.

Robert W. Baird analyst David Parker downgraded his rating for the stock to "Neutral" from "Outperform." He assigned a price target of $36.

Currently, the company faces regulatory uncertainty, due to pending rate relief requests, Parker noted, adding that until this uncertainty eases, the company will likely only generate average returns. However, he said, stock prices could rise if favorable regulatory decisions come through.

Key risks to earnings, Parker said, include any changes in regulation and fluctuations in weather and commodity prices.

Looking ahead, Parker said the company's earnings will start to improve in 2010, as rate relief from multiple jurisdictions should move the company's return on investment closer to allowed levels.

Parker held to his 2009 earnings estimate of $2.25 per share. Earlier, the company affirmed an adjusted earnings per share estimate between $2.17 per share and $2.32 per share. Analysts polled by Thomson Reuters estimate a full-year profit of $2.40 per share.