As previously reported, Goldman Sachs analyst Michael Lapides upgraded Entergy (ETR) and American Electric (AEP), both to Buy from Neutral, as he re-evaluated his coverage of Americas Utilities. He maintains a Neutral view overall on Utilities, adding that he continues to see greater potential returns among Diversified Utilities than Regulated Utilities. For Entergy, he raised his estimates, largely on revised regulatory assumptions, and increased his price target to $88 from $87, stating that the stock continues to trade at a Diversified Merchant Utility multiple despite being nearly done transforming to a pure-play Regulated one. For American Electric, Lapides increased his earnings estimates primarily due to higher tracked capital spending at the T&D segment, though he decreased his price target slightly to $74 from $76.

Scotiabank analyst Andrew Weisel lowered the firm's price target on American Electric to $86 from $92 and keeps an Outperform rating on the shares. Interest rates remain stubbornly high, which has weighed on the sector's valuation, the analyst tells investors. The firm views both Canadian and North American utility stocks as undervalued, but sees upside for Canadian utility stocks following their steady underperformance compared to its U.S. peers. Fundamentally, Scotiabank remains bullish on the group's long-term earnings outlook given the tailwinds driving its strong rate base growth.