Pepco Holdings, Inc. (POM)

We expect <b>Pepco Holdings, Inc.</b> (<a href=http://www.zacks.com/stock/quote/pom>POM</a>) to face stiffer competition from its fully regulated peers with similar dividend yields, such as Progress Energy. Thus, we expect Pepco shares to Underperform its peers in the future. <P> Pepco s $1.2 billion Mid-Atlantic Power Pathway (MAPP) transmission project is currently underway with an in-service date of 2014. However, the project could be delayed due to slower-than-expected load growth. <p> We initiate coverage on Pepco with an Underperform recommendation as we expect the stock to face stiffer competition from its fully regulated peers with similar dividend yields, going forward. Our $14 target price values the stock at 11.3x 2011 EPS.

Comments

Leave a Reply