Progress Energy (PGN) is one of the nation’s larger pure-play electricity utilities with solid rate base growth opportunity in the long-term. Given the disappointing outcome of the Florida rate case and a lowered 2010 guidance, we expect the stock to remain under pressure in the near term.
Furthermore, the weak economic conditions in Florida, which have slowed customer growth and reduced demand for electricity, remain worrisome issues. Thus, we expect 2010 to be a challenging year for Progress Energy.
Accordingly, we downgrade our recommendation to UNDERPERFORM with a target price of $36.00.Zacks Investment Research
