The upgrade comes as UBS believes the stock is trading at historical lows when compared to peers of about 7% to 8%, after a drop in long term guidance and poor performance of the company's Brazilian hydro asset, The Fly reports.
Shares of Duke Energy closed higher by 1.63% to $70.95 on Tuesday afternoon.
"For 2016, management now expects only the remaining core regulated and commercial businesses to grow 4%-6% into 2016 from 2015E guidance of $4.13. In combination with flat International expectations of only $0.30 for 2016 (vs $0.60 in 2014), this implies a flattish ~$4.65 for 2016, although we don't expect formal explicit 2016 guidance until February," the firm said in a note, according to Barron's.
Duke Energy is a Charlotte, NC-based energy and utilities company.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate DUKE ENERGY CORP as a Buy with a ratings score of B. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and growth in earnings per share. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- DUK's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 1.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 40.17% 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. Regardless of the strong results of the gross profit margin, the net profit margin of 14.37% trails the industry average.
- DUKE ENERGY CORP has improved earnings per share by 8.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DUKE ENERGY CORP reported lower earnings of $3.46 versus $3.63 in the prior year. This year, the market expects an improvement in earnings ($4.59 versus $3.46).
- Even though the current debt-to-equity ratio is 1.07, it is still below the industry average, suggesting that this level of debt is acceptable within the Electric Utilities industry. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.32 is very low and demonstrates very weak liquidity.
- Net operating cash flow has declined marginally to $2,517.00 million or 1.21% when compared to the same quarter last year. Despite a decrease in cash flow of 1.21%, DUKE ENERGY CORP is in line with the industry average cash flow growth rate of -7.34%.
- You can view the full analysis from the report here: DUK