Update (9:43 a.m.): Updated with Friday market open information.
NEW YORK (TheStreet) -- UBS upgraded Dynegy (DYN) to "neutral" from "sell" and set a $25 target price. The firm noted expectations that the company will be allowed to bid in PJM MAAC pricing in the upcoming MISO capacity auction.
The stock was up 1.57% to $25.29 at 9:42 a.m. on Friday.
Separately, TheStreet Ratings team rates DYNEGY INC as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate DYNEGY INC (DYN) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Independent Power Producers & Energy Traders industry. The net income has significantly decreased by 108.6% when compared to the same quarter one year ago, falling from $1,053.00 million to -$91.00 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Independent Power Producers & Energy Traders industry and the overall market, DYNEGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- DYNEGY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, DYNEGY INC swung to a loss, reporting -$3.59 versus $7.89 in the prior year. This year, the market expects an improvement in earnings (-$0.04 versus -$3.59).
- In its most recent trading session, DYN has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Regardless of the rise in share value over the previous year, we feel that the risks involved in investing in this stock do not compensate for any future upside potential.
- Net operating cash flow has significantly increased by 197.72% to $43.00 million when compared to the same quarter last year. In addition, DYNEGY INC has also vastly surpassed the industry average cash flow growth rate of -48.94%.
- You can view the full analysis from the report here: DYN Ratings Report