On Monday analysts at Morgan Stanley initiated coverage on Duke Energy Corp (DUK) with an “Overweight” rating as they believe that DUK trades at a discount compared to its peers.
The analysts give Duke Energy a price target of $72.50. That valutation is +12.7% upside from Friday’s closing price of $64.32.
Morgan Stanley commented, “DUK has one of the more attractive value propositions among large-cap regulated utilities, in our view. The stock trades at a ~5% discount to large-cap peers on 2014e P/E. We think it should trade at a premium as it is the most liquid utility stock (with $45bn market cap) and is evolving into one of the more defensive names in the sector. We expect Duke to address its many uncertainties over the next 12 months, show strong EPS growth of 4-6% post-2013, and offer a dividend yield of 4.8%, the highest among its peers.”
Duke Energy shares were up 9 cents, or +0.12%, during morning trading on Monday.
The Bottom Line
Shares of Duke Energy (DUK) have a 4.76% dividend yield, based on Friday’s closing stock price of $64.32. The stock has technical support in the $59-$60 price area. If the shares can firm up, we see overhead resistance around the $66-$68 price levels.
Duke Energy Corp (DUK) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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