Operating through its electric power subsidiary Idaho Power Co., the holding company is now trading at a premium to small cap peers, analysts said.
"We downgrade IDACORP on the heels of its sharp outperformance versus peers (+16.8% over the past month versus UTY +7.9%), which we believe takes relative valuation to a reasonable, though no longer compelling, level that fairly captures IDACORP's attractive service territory and potential incremental generation opportunities," analysts said.
Additionally, third quarter earnings reported on October 30 were not supportive of meaningful estimate revisions (on an ongoing basis), analysts added.
IDACORP reported third quarter EPS of $1.73, which included approximately 22 cents per share of tax benefits Keybanc sees as non-recurring. Excluding items, the earnings results came in below Keybanc estimates of $1.56.
Separately, TheStreet Ratings team rates IDACORP INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate IDACORP INC (IDA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, revenue growth and growth in earnings per share. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Electric Utilities industry average. The net income increased by 21.1% when compared to the same quarter one year prior, going from $71.75 million to $86.89 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.3%. Since the same quarter one year prior, revenues slightly increased by 0.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- IDACORP INC has improved earnings per share by 21.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, IDACORP INC increased its bottom line by earning $3.69 versus $3.37 in the prior year. For the next year, the market is expecting a contraction of 2.7% in earnings ($3.59 versus $3.69).
- You can view the full analysis from the report here: IDA Ratings Report