Edward Jones Analyst Andy Pusateri has a “sell” rating on Wisconsin Energy Corp (WEC). He says he does not see a fundamental flaw with the company, management or strategy.
“When I look at Wisconsin Energy, the issue is really valuation, and utilities in general obviously have been on a good run and are trading near an all-time high,” Pusateri says. “Wisconsin Energy is in the same boat; if you look at our 2015 estimate, it’s trading at nearly 20 times earnings. That’s very high for a utility in general, especially utility with a growth outlook like we see for Wisconsin Energy.”
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Utility stocks in general are expensive at the moment, Pusateri says. And, Wisconsin Energy is trading at the high end of the range.
“They have had a good run, but now I think their focus is on returning more cash to shareholders versus robust earnings growth that we saw over the last 10 years,” he says. “So to me there are better places to be.”
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