Duke Energy (DUK) Stock Climbing on Analyst Upgrade

NEW YORK (TheStreet) -- Shares of Duke Energy (DUK) are climbing 0.48% to $76.09 after analysts at Sanford C. Bernstein upgraded the company to "outperform" from "market perform" and raised their price target to $86 from $81, theflyonthewall.com reports.

"Over the last twelve months, Duke has repositioned its business around its core regulated segment by selling its competitive Midwest fleet and repatriating cash from its international business," analysts said.

Several earnings per share growth drivers for the company include growth in retail and wholesale electricity sales, capital investment project in Florida, Ohio and Indiana, investment in FERC regulated transmission assets, and the repurchase of shares with the proceeds from the sale of Duke's Midwest generation assets.

The North Carolina-based company operates as an energy company through three segments: Regulated Utilities, International Energy, and Commercial Power.

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 increase in stock price during the past year, compelling growth in net income, expanding profit margins, growth in earnings per share and good cash flow from operations. 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 stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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 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).
  • Net operating cash flow has slightly increased to $1,440.00 million or 4.87% when compared to the same quarter last year. Despite an increase in cash flow, DUKE ENERGY CORP's average is still marginally south of the industry average growth rate of 11.62%.
  • You can view the full analysis from the report here: DUK Ratings Report

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