Jefferies Raises Price Target on Consolidated Edison (ED)

Jefferies is reiterating its Hold rating on shares of Consolidated Edison (NYSE: ED) while raising its price target from $52 to $54.

The firm notes that the company has not been able to earn its allowed return since 2007 and is forecasting ROE of 9.7 percent in 2011 and 10 percent in 2012.

ED is in its third electric rate plan since 2008 and has been unable to earn the allowed return in any of the three plans. As a result, the company has pulled back some of its infrastructure investments.

Jefferies is maintaining its 2011, 2012, and 2013 EPS estimates of $3.50, $3.65, and $3.85, inline with the company's 2011 guidance of $3.45-$3.65.

An analyst at Jefferies comments, "The current "special" 10 percent P/E is above the five year historical average of 5.6 percent. This premium is warranted because the current rate plan provides certainty. There is a high probability Con Ed will be successful in its effort to extend out, by one year, the expiry of its rate plan to March 2014. Additionally Con Ed's lower capital spending levels make it unlikely that the company will issue equity over the next several years."

For more ratings news on Consolidated Edison click here and for the rating history of Consolidated Edison click here.

Shares of Consolidated Edison closed at $54.50 yesterday.

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