The firm said it lowered its rating on the energy company based on a valuation call.
"At current levels...we see the stock well up with events and offering very little headroom for the value investor, even if we assume top-end execution. For sure our call in part reflects our growing caution on regulated utilities as a group with an ongoing "melt-up" pushing the envelope in terms of both relative and absolute value," Deutsche Bank said.
The firm raised its price target on Duke Energy to $81 from $78.
Separately, TheStreet Ratings team rates DUKE ENERGY CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate DUKE ENERGY CORP (DUK) 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 growth in earnings per share, increase in net income, revenue growth, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DUKE ENERGY CORP reported significant earnings per share improvement 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. We feel that this trend should continue. During the past fiscal year, DUKE ENERGY CORP increased its bottom line by earning $3.73 versus $3.06 in the prior year. This year, the market expects an improvement in earnings ($4.60 versus $3.73).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electric Utilities industry. The net income increased by 79.6% when compared to the same quarter one year prior, rising from $339.00 million to $609.00 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 1.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Electric Utilities industry and the overall market, DUKE ENERGY CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: DUK Ratings Report