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HomeMy WebLinkAboutCOC 5 05 2011 IDA Q1 Results.pdf Additional required disclosures under NASD Rule 2711 are provided on the last page of this document. McAdams Wright Ragen > 925 Fourth Avenue, Suite 3900 Seattle, WA 98104 888.567.6297 > www.mwrinc.com Page 1 of 2 IDACORP reported Q1 EPS of $0.60 versus the prior year EPS of $0.34. Despite higher deliveries and off-system sales on colder weather, lower rates kept revenues flat year over year. However, this was more than made up for by considerably lower fuel expense and power cost adjustment. We are leaving unchanged our 2011 and 2012 estimates of $2.90 and $3.00, respectively. A 12x multiple against the 2012 estimate results in a price target of $36. We maintain our Hold rating. Risks: rate case uncertainty, rising interest rates, natural gas price volatility and poor hydrogeneration conditions. Company Description: IDACORP, Inc., through its subsidiary, Idaho Power Company, engages in the generation, transmission, and distribution of electric energy in the United States to approximately 490,000 retail customers in Idaho and Oregon. IDACORP, Inc., through its other subsidiaries, invests in housing and other real estate properties in the United States, Puerto Rico, and the U.S. Virgin Islands; and has a 50% interest in 9 hydroelectric plants with a total generation capacity of 45 MW in Idaho and northern California. The company was founded in 1915 and is based in Boise, Idaho. 5.5.2011 Jennifer Sireklove, CFA > jsireklove@mwrinc.com > 206.664.8875 Hydro and Weather Benefit Q1 Earnings; Maintaining Hold $38.91 | HOLD •Q1 EPS of $0.60 versus $0.34 last year and $0.47 expected, on colder weather and better hydro. •We are maintaining our Hold rating and price target of $36 based on 12x our 2012 estimate of $3.00. 52 Week High $39.39 52 Week Low $31.22 P/E FY10A 13.2x FY11E 13.4x FY12E 13.0x Target Price $36 Shares Out (Mil) 49.5 Market Cap (Mil) $1,926 Avg Daily Vol (Mil) 225.4 Dividend / Yield $1.20/3.1% 3- 5 yr EPS Growth 5% Book Value/Share $29.17 Fiscal Year End Dec. EPS ESTIMATES FY10A $2.95 FY11E $2.90 FY12E $3.00 IDACORP, Inc. (IDA) Additional required disclosures under NASD Rule 2711 are provided on the last page of this document. McAdams Wright Ragen > 925 Fourth Avenue, Suite 3900 Seattle, WA 98104 888.567.6297 > www.mwrinc.com Page 2 of 2 Required Disclosures: Jennifer Sireklove, CFA > jsireklove@mwrinc.com > 206.664.8875 • I, Jennifer Sireklove, CFA, hereby certify (1) that the views in this research note accurately reflect my personal views about any or all of the subject securities or issuers referred to in this note and (2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views in this note. As of March 31, 2011 From To Date Price Price Target $36 5/24/2010 $32.40 Coverage Initiation Hold 5/24/2010 $32.40 Ratings Change Focus List Change Target Price Change The firm expects to receive and intends to seek compensation for investment banking services from the subject company in the next three months. Price targets are subject to change as new information becomes available, and reflect our current judgment regarding this security. Note that there are risks that may impede the achievement of a predicted price target. Price targets are based on fundamental factors such as historical and projected earnings, cash flow, discounted cash flow, relative book value, peer group evaluation, relative sector valuations, and expectations on general market and economic conditions. McAdams Wright Ragen employs a Ratings System (in effect since 6/12/2002), defined as follows. Buy/Addition to InStock Recommended List: We expect the Stock to Outperform the Market. Hold/Addition to InStock Recommended List: We expect the Stock to be a Market Performer. Sell/Removal from InStock Recommended List: We expect the Stock to Underperform the Market. Ratings System in effect between 2/7/2002 and 6/12/2002: Strong Buy, Buy, Hold, Underperform, Sell. Ratings System in effect prior to 2/7/2002: Buy, Moderate Buy, Hold, Underperform, Sell. Percentage of Rated Stocks Currently Assigned this Rating Percentage of Rated Stocks with this Rating with where MWR has provided investment banking services within the previous 12 months. Buy 51% 6% Hold 35% 4% Sell 14% 0% For additional price Chart and Ratings History disclosures, please go to http://www.mwrinc.com/ClientAccess/quotesresearch.html, or to request information, please contact MWR’s Research Department at (206) 664-8854, research@mwrinc.com Other disclosures: This is not a complete analysis of every material fact regarding any company, industry or security. The opinions expressed here reflect our judgment at this date and are subject to change. The information has been obtained from sources we consider reliable, but we cannot guarantee the accuracy. Our firm, or its officers, research personnel, other employees or customers may have long or short positions in the securities or options of the recommended issuers, may buy and sell the securities or options, may serve as an officer or director of any company mentioned, prior to or at the time of publication of the report or thereafter.