Black Hills hits 19-month low after BofA cuts rating, PT
13/10/2022 17:26
** Natural gas utility Black Hills Corp BKH.N shares hit
their lowest since March 2021 after losing as much as 5.7% to
$59.08
** BofA Global Research downgrades BKH to "neutral" from
"buy" and slashes PT to $66 from $87 after cutting earnings
estimates for 2023 through 2026
** Cites "greater operating and financing expense pressures
into 2023 that lingers into future years as well"
** Expects 2023 to be a "lost year" for BKH as cost
pressures stall growth rate
** Adds that though BKH may sell assets to strengthen its
balance sheet, "this is not a panacea" given materially lower
valuations across the sector
** "Overall expect a cautious 3Q setup for many utilities
providing an initial glimpse on FY23 guide despite the inaugural
earnings call window to articulate IRA upsides" - BofA,
referring to the U.S. Inflation Reduction Act (IRA) passed in
August which incentivizes renewables developers
** Says BKH's natgas skew is now a relative detriment vs.
its peers since the IRA's passage
(Reporting by Ruhi Soni in Bengaluru)
((Ruhi.Soni@thomsonreuters.com
Twitter: https://twitter.com/ruhithere))