We lift our 12-month target price by $3 to $49 on higher peer valuations. We keep our '19 and '20 EPS estimates unchanged at $2.25 and $2.40, respectively. LNT posts Q2 EPS of $0.40 vs. $0.43, below our $0.45 estimate and the $0.44 S&P Capital IQ consensus. Results reflect lower utility earnings and flat Non-utility & Parent earnings. Unfavorable weather, higher depreciation cost, a higher effective tax rate, dilution and other items hurt utility results, but were partly offset by higher revenues driven by an increasing rate base. At Non-utility & Parent, higher interest expense was offset by other items. Our target is a 5% peer-premium 20.4x our '20 EPS estimate, which we think is warranted by our projection of a below-peer three-year EPS growth rate that rises to faster than peers over time. We see strong capital spending continuing to grow LNT's rate base and customer rates. We see dividends (yielding 2.8%) growing in line with EPS given our projection of a 63% '19 payout ratio.
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