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Analysts’ 2016 Estimates and Price Targets for PPL

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Jan. 13 2016, Updated 8:04 a.m. ET

Outlook

PPL (PPL) became a pure-play regulated utility (XLU) in 2015. This strategic change could be a growth engine for PPL’s future performance.

The company’s management is aiming for 6% earnings growth in the next five years. This growth plan is backed by a heavy capital expenditure strategy. Management is expecting a compounded annual base rate of growth of 7% in the next five years.

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Wall Street analysts’ estimates

With its focus on regulated operations, PPL’s revenues are expected to come in at $8.3 billion in 2016 according to Wall Street analysts’ estimates. Revenues for the last 12 months as of September 30, 2015, stood at $10.8 billion. Earnings are projected to come in at $2.32 per share against $2.2 per share in 2015.

Price recommendations

Analysts project a one-year price target of $36.0 for PPL compared to its current market price of $34.2 as of December 24, 2015. This is an estimated upside of 5.3%. Among the 22 analysts tracking PPL, there are an equal number of analysts recommending “buys” and “holds” on the stock. None of the analysts are recommending a “sell” on the stock.

Among PPL’s peer group, Edison International (EIX) has an estimated price target of $66, or a 9.5% one-year upside, according to Wall Street analysts. It’s currently trading at $60. American Electric Power (AEP) has a price target of $62 in the next one year. Its market price is $58.4 as of December 24, 2015. Consolidated Edison (ED) has a price target of $62 against its current market price of $64.

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