PNM Resources raised at Mizuho on anticipated Avangrid deal

Jun. 22, 2022 12:38 PM ETPNM Resources, Inc. (PNM), AGRBy: Carl Surran, SA News Editor2 Comments

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PNM Resources (NYSE:PNM) +2.3% in Wednesday's trading as Mizuho upgrades shares to Buy from Neutral with a $52 price target, saying it continues to expect Avangrid (NYSE:AGR) will buy the company for $50.30/share.

Investors would realize an annualized return of 18%, assuming a transaction close by May 2023, according to Mizuho analyst Paul Fremont.

While the ALJ recommended a rate cut of $98.3M, which represents a near-term cash drain on the company, we believe the longer-term cash flow of the company will remain intact," Fremont writes, as he expects PNM (PNM) will file a GRC by year-end with "a constructive outcome to support the long-term cash flow."

PNM's (PNM) failure to get regulators to agree to a merger is "further concerning since it appears that was the company's only plan for the future," Power Hedge wrote earlier this year in an analysis published on Seeking Alpha.

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