PPL Pennsylvania Power and Light (ppl)

[Timothy Smith]

Tudor Pickering downgrades PPL to Hold from Buy with a $34 price target, cut from $38, as it expects U.K. headwinds, including the exchange rate and earnings quality, will continue to weigh on the stock.

The firm estimates PPL’s earnings growth at ~4% through 2017 despite growing ratebase at 7% through 2019; despite the strong ratebase growth, PPL's U.K. utility earnings are flat through 2017 due to a change in regulatory regimes while the U.S. dollar has been strengthening relative to the British pound for a year.