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[eFinanceMarkets]

$PPL PPL Corp. (PPL +0.2%) is upgraded to Buy from Hold with a $36 price target at Deutsche Bank, which sees the stock as a “special situation value play” and thinks the current valuation is "too cheap to ignore.”

Deutsche Bank also says U.K. energy regulator Ofgem’s failure to implement a mid-period review of RIIO-ED1 offers "decent prospects for a near-term re-rating catalyst."

The firm also upgrades American Electric Power (NYSE:AEP) to Buy with a $75 price target as a quality regulated growth name which looks to have been unduly punished in the recent selloff.

In broader commentary on the utilities sector, DB notes the group is down 11% since November and has underperformed the S&P 500 by ~16% over the same period, which it attributes primarily to rising interest rates and inflation expectations as well as tax reform, which remains a relative earnings headwind for utilities vs. other sectors and has cash and financing implications which companies and investors are still digesting.

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Now read: PPL - U.K. Woes Might Last For Year(s) »