We raise our 12-month target price to $36 from $32, 14.8x our 2020 EPS estimate, a discount to peers. We widen our 2020 EPS estimate by $0.01 to $2.42 and narrow our 2021 estimate by $0.04 to $2.45. PPL posts Q2 EPS of $0.55 vs. $0.58, in line with the S&P Capital IQ consensus estimate, which includes a $0.06/share unfavorable impact from Covid-19 in the quarter. PPL announced it is initiating a process to sell its U.L utility business, Western Power Distribution (WPD), and expects a sale in the first half of 2021. The sale would strategically reposition PPL as a purely-U.S. utility holding company. The proceeds from the sale will be used to strengthen PPL's balance sheet (mid-teens funds from operations-to-debt target),to try to bring PPL's long-term earnings growth in line with U.S. utility peers, and potentially support U.S. asset acquisitions. We also believe this transaction would remove an overhang on the stock from regulatory changes in the U.K. rate setting process, known as "RIIO-ED2."
|Facebook to Prohibit Election Ads that Calls Electio...|
|Market Chatter: Tesla Said to Launch Cheaper Chinese...|
|Hess, ExxonMobil Greenlight Payara Oil Project in Of...|
|Cabot Signs Supply Agreement with ADA Carbon, to Sel...|
|Market Chatter: NextEra Energy CEO Says Hostile Take...|