Wells Fargo cuts its ratings on NextEra Energy (NEE), Public Service Enterprise (PEG) and Southern (SO) to Market Perform and cuts longer-term earnings estimates for several diversified power companies including Exelon (EXC) and Constellation (CEG), citing deterioration in the fundamental outlook sparked by a drop in power prices since October in the wake of lower natural gas costs.
Public Service Enterprise (PEG -1.5%) trades lower after Goldman cuts the shares to Neutral, citing low demand growth and weak pricing for regional power markets, and potential risk from the upcoming New Jersey BGS auction in February.
Two Public Service Enterprise Group (PEG +0.5%) units have filed a lawsuit against Dynegy (DYN -1.9%) in an effort to block its transfer of some natural-gas-fired and coal-fired generating facilities to new subsidiaries.
Big power producers have continued to report some solid earnings, but smaller producers are getting hit in the margins by lower energy prices. Despite poor quarterly results from Calpine (CPN -1.2%), RRI Energy (RRI +0.5%) and Public Service Enterprise Group (PEG -2.9%), the small producers are reaffirming their full-year outlooks.