We lift our 12-month target price by $6 to $83 on higher peer valuations. We keep our '19 and '20 EPS estimates at $3.55 and $3.80, respectively. WEC posts Q3 EPS of $0.74, vs. $0.74, below our $0.75 estimate and over the $0.72 S&P Capital IQ consensus. Lower Wisconsin operating expenses, higher Illinois and other states earnings and higher wind tax credits were offset by lower Wisconsin margins, higher Wisconsin depreciation and higher corporate expenses and interest expense. Our target is a peer-premium 21.8x our '20 EPS estimate, which we think is warranted by our view of an above-peer three-year EPS growth rate. We see strong capital spending, which includes new regulated gas and renewable generation as well as gas distribution spending, driving rate base growth and higher customer rates. We also see significant spending on unregulated renewable energy projects helping to boost EPS growth. We see dividends (yielding just 2.6%) growing in line with EPS over the next few years.
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