PPL Stock Downgraded to ‘Hold’ at Jefferies
NEW YORK (TheStreet) -- PPL's (PPL) - Get Report stock rating was slashed to "hold" from "buy" at Jefferies on Thursday morning. The firm also reduced its price target to $38 from $41.50.
The lower rating and price target come in the wake of the U.K.'s decision to leave the European Union last month.
"We are downgrading PPL...due to lower earnings from a strong U.S. dollar. The company's U.K. business accounts for half of the company's earnings," the firm wrote in an analyst note.
Jefferies also expects the company to miss its 5% to 6% earnings per share growth rate. Unless the pound has a significant rally, the firm projects earnings per share will be flat to declining.
"Management has been very opportunistic regarding the ability to apply hedges to protect earnings from the exchange rate volatility but with 2018 only hedged 41% and no hedges for 2019 we believe earnings will be flat to declining," the firm added.
The Allentown, PA-based utility holding company delivers electricity to customers in the U.K., Pennsylvania, Kentucky, Virginia and Tennessee.
Shares of PPL closed higher by 0.59% to $37.52 on Wednesday.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of A- on the stock.
The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and solid stock price performance.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: PPL