The successful sale of the company's Midwest generation assets to Dynegy (DYN) was cited as the reason for the price target increase, according to analysts.
Regarding the company's rating, the analyst firm reinstated coverage of the North Carolina-based electric power holding company to "neutral" from "outperform."
"While we like the Duke story and see absolute upside potential, we do not find that the stock currently trades fully differentiated from peers, and believe a Neutral rating is best suited for the shares," analysts said.
Separately, Duke Energy will plead guilty to violating the federal Clean Water Act, as recent state-mandated tests found that more than 150 residential wells tested near Duke's dumps in North Carolina have failed to meet groundwater standards, the Associated Press reported. As a result, residents have been advised not to use their water for drinking or cooking.
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 compelling growth in net income, expanding profit margins, growth in earnings per share, reasonable valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 990.7% when compared to the same quarter one year prior, rising from -$97.00 million to $864.00 million.
- 37.16% is the gross profit margin for DUKE ENERGY CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.24% is above that of the industry average.
- DUKE ENERGY CORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DUKE ENERGY CORP increased its bottom line by earning $4.65 versus $3.63 in the prior year. This year, the market expects an improvement in earnings ($4.66 versus $4.65).
- DUK, with its decline in revenue, slightly underperformed the industry average of 2.8%. Since the same quarter one year prior, revenues slightly dropped by 3.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: DUK Ratings Report