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Fly News Breaks for February 23, 2016
POM, EXC
Feb 23, 2016 | 07:23 EDT
Citi analyst Praful Mehta downgraded Exelon (EXC) to Sell saying the Pepco Holdings (POM) deal is "value destructive." While Pepco adds $5B of equity value, it also adds $4B of additional parent net debt and 58M shares, Mehta tells inventors in a research note. He has a $27 price target for Exelon shares.
News For EXC;POM From the Last 2 Days
EXC
Sep 20, 2018 | 10:08 EDT
Shares of General Electric (GE) dropped sharply in morning trading after a company executive confirmed an issue with a line of turbines, prompting a JPMorgan analyst to lower his price target on shares. TURBINE PROBLEM: GE Power Chief Executive Officer Russell Stokes said in a blog post on LinkedIn that the company recently identified an "oxidation issue" that impacts the lifespan of blades in its HA-Class turbines. "Obviously, this was a frustrating development, for us, as well as for our customers," Stokes said, adding that the company has identified a fix and has been working proactively with HA operators to address impacted turbines. He also added that the "minor adjustments" the company is making "do not make the HA any less of a record setting turbine," as "they are meeting -- and in many cases exceeding -- their performance goals at every customer site today." ANOTHER 'SHOE DROPS': JPMorgan analyst Stephen Tusa kept an Underweight rating on GE and cut his price target to $10 from $11, telling investors in a research note that the impact on "asset value" from a failure at GE's U.S. H-frame launch customer, while tough to estimate, represents a negative development for a company that has little wiggle room for more "shoes to drop." The analyst's channel checks suggest GE has experienced a failure in a first stage blade on an H-frame in one of its two initial marquee installations in the U.S., Colorado Bend, and said GE is "minimizing" the issue by referring to the problem in general as an "oxidation issue." Tusa said he believes the situation is worse than what GE said, as the problem is material enough for Exelon (EXC) to have shut the Texas plant down, along with the "award winning" Wolf Hollow plant for precautionary measures. If the situation is as bad as it seems, there should no longer be any doubt that GE Power has company-specific issues, Tusa continued, adding that he is now assuming weaker results at power with some franchise value impact. PRICE ACTION: In morning trading, shares of GE are down 3.3% to $12.44.
EXC
Sep 20, 2018 | 06:45 EDT
JPMorgan analyst Stephen Tusa lowered his price target for General Electric to $10 from $11 and keeps an Underweight rating on the shares. The stock closed yesterday up 19c to $12.86. The impact on "asset value" from a failure at GE's U.S. H-frame launch customer, while tough to estimate, represents a negative development for a company that has little wiggle room for more "shoes to drop," Tusa tells investors in a research note partially titled "Another Shoe Drops: H Frame Blade Failure Risks Franchise Impairment." The analyst's channel checks, which he says are now confirmed by GE Power's CEO, GE investor relations and the customer, suggest GE has experienced a failure in a first stage blade on an H-frame in one of its two initial marquee installations in the U.S., Colorado Bend. GE is minimizing the issue, referring to the problem in general as an "oxidation issue," Tusa writes. However, one channel participant the analyst talked to spoke of the break at less than 10,000 hours as "historic." Further, Tusa says the problem is material enough for Exelon (EXC) to have shut the plant down, along with the "award winning" Wolf Hollow plant for precautionary measures. The analyst believes this suggests the situation is worse than what GE says. If as bad as it seems, there should no longer be any doubt that GE Power has company-specific issues, Tusa contends. The analyst's new price target assumes weaker results at GE Power and some franchise value impact.
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