CenterPoint Energy raised to Buy at Guggenheim on regulatory, capex upside

Justin Sullivan/Getty Images News

CenterPoint Energy (NYSE:CNP) is little changed in Monday's trading after Guggenheim Securities upgraded the stock to Buy from Neutral with a $32 price target, driven by recent regulatory outcomes and legislative action in Texas, management engagement on existing regulatory constructs and upward capex revision, and management's focus on value creation.

Despite an 8% premium to its peer group, CenterPoint (CNP) is not at the highest relative premium in recent history, while risks have subsided, regulatory constructs have improved and management is looking at some of the best fundamentals and capex upsides in recent history, according to Guggenheim's Shahriar Pourreza.

The analyst said among the 40-plus utility names under his team's coverage, CenterPoint (CNP) "remains one of only a few utilities not dealing with a company specific tail risk, binary event, deteriorating regulatory construct, balance sheet concern or management credibility issues."

More on CenterPoint Energy:

• Financial and valuation comparison to sector peers
• Analysis: CenterPoint Energy: Incrementalist Strategy Yields Security And Growth Amid Macro Volatility
• Stock price return: Down 2% YTD, up 1.5% in the past 12 months