IDA110112-180446.pdf.pdf

Please see page 4 for rating definitions, important disclosures
and required analyst certifications
All estimates/forecasts are as of 11/01/12 unless otherwise stated.
Wells Fargo Securities, LLC does and seeks to do business with companies
covered in its research reports. As a result, investors should be aware that
the firm may have a conflict of interest that could affect the objectivity of the
report and investors should consider this report as only a single factor in
making their investment decision.

November 1, 2012

Equit Research
IDACORP, Inc.
IDA: Increasing 2012E EPS on Tax & Weather Benefits
No Change to Longer-Term Outlook--Reiterate Outperform

• Summary. IDA reported strong Q3 results and raised 2012 guidance to $3.30-
3.40 from $3.20-3.35. We are increasing our 12E EPS to $3.35 from $3.27, but
keeping our post-12 outlook intact. We are increasing our 12-18 month valuation
range to $47-49 from $45-47 and reiterating our Outperform rating.
• EPS Outlook. We are raising our 2012E EPS to $3.35 from $3.27 primarily reflecting a $7.8mm, or ~$0.16/share, tax benefit, and the impact of continued
favorable weather on sales. These benefits are partially offset by earnings sharing
provisions. While mgmt also touted strength in the underlying business, we are
maintaining our 2013E & 2014E EPS of $3.23 & $3.35. Underlying strength,
including potential higher ongoing tax benefits, could serve to lower our assumed
ADITC usage of $15mm in ‘13E & $25mm in ‘14E, which we would view favorably.
• Sales/Economic Update. Management expressed optimism regarding the
Idaho economy and highlighted falling unemployment, an improving housing
market and climbing customer growth. We were particularly encouraged by
comments on “potential new large loads” related to the Idaho business
environment. While it could take some time for growth to materialize (2013 sales
growth expected to be modest with a pick-up to 1.0-1.3% annual growth
beginning in 2014), we view the momentum favorably.
• Resource Update. With the dividend raise and major regulatory events in the
rear-view mirror, investor focus has shifted to questions around Idaho Power’s next rate base growth drivers. Key items of interest in the June 2013 draft IRP
will be the expected in-service date of the Boardman-to-Hemingway (B2H)
transmission line (currently no earlier than 2018) and the amount and timing of
other resource needs. We would view plans for a second unit at Langley Gulch
particularly favorably.
• Reiterate Outperform. Shares of IDA have outperformed the S&P Utilities by
10% over the last three months, and valuation now looks more reasonable (only
modest discounts to peers on underlying EPS power). That said, we do not think
shares are embedding potential growth projects in the 2014-2016 time frame or
the potential extension, in some form or fashion, of the 2012-2014 ADITC
regulatory compacts. Given the potential upside, we remain comfortable with the
risk/reward and highlight IDA’s positive features, including minimal near-term
regulatory risk, cooperative regulatory relationships, strong balance sheet with no
external equity needs for the foreseeable future, attractive service territory, and
3.4% dividend yield with above-average dividend growth potential.

Valuation Range: $47.00 to $49.00 from $45.00 to $47.00
We value IDA under P/E multiple (14-14.5X multiple on our 14E EPS of $3.35) and
dividend discount analysis. Risks to our valuation include project
delays/cancellations, negative regulatory developments and economic weakness.

Investment Thesis:
We are attracted to IDA's increasingly constructive regulatory environment, near-
term earnings visibility, healthy balance sheet, attractive service territory, and
reasonable valuation.

Outperform

Sector: Regulated Electric Utilities
Market Weight

Earnings Estimates Revised Up

2011A 2012E 2013E
EPS Curr. Prior Curr. Prior
Q1 (Mar.) $0.60 $0.50 NC NE
Q2 (June) 0.42 0.71 A NC NE
Q3 (Sep.) 2.16 1.84 1.52 NE
Q4 (Dec.) 0.18 0.30 0.54 NE
FY $3.36 $3.35 3.27 $3.23 NC
CY $3.36 $3.35 $3.23
FY P/E 13.3x 13.4x 13.9x
Rev.(MM)$1,027 $1,151 $1,152
Source: Company Data, Wells Fargo Securities, LLC estimates, and Reuters NA = Not Available, NC = No Change, NE = No Estimate, NM = Not Meaningful V = Volatile, = Company is on the Priority Stock List

Ticker IDA
Price (11/01/2012) $44.80
52-Week Range: $38-45
Shares Outstanding: (MM) 50.2
Market Cap.: (MM) $2,249.0
S&P 500: 1,448.68
Avg. Daily Vol.: 163,345
Dividend/Yield: $1.52/3.4%
LT Debt: (MM) $1,536.6
LT Debt/Total Cap.: 45.7%
ROE: 10.0%
3-5 Yr. Est. Growth Rate: 4.0%
CY 2012 Est. P/E-to-Growth: 3.4x
Last Reporting Date: 11/01/2012
Before Open
Source: Company Data, Wells Fargo Securities, LLC estimates, and Reuters

Sarah Akers, CFA, Senior Analyst
[phone] /
[e-mail]
Neil Kalton, CFA, Senior Analyst(314) 875-2051 / [e-mail] Reeder, Associate Analyst
[phone] /
[e-mail]
Glen F. Pruitt, Associate Analyst
[phone] /
[e-mail]
WELLS FARGO SECURITIES, LLC
Utilities EQUITY RESEARCH DEPARTMENT

2

Company Description:
IDACORP (IDA) is the holding company for Idaho Power Company (IPC), a regulated electric utility serving
more than 485,000 customers in southern Idaho, including Boise and surrounding areas, and eastern Oregon.
In addition, IDACORP Financial Services (IFS), a non-utility business, invests in affordable housing tax
credits.

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IDACORP, Inc. EQUITY RESEARCH DEPARTMENT

3

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W
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F
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c
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,

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c
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f
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s

WELLS FARGO SECURITIES, LLC
Utilities EQUITY RESEARCH DEPARTMENT

4

Required Disclosures

$25.00
$27.00
$29.00
$31.00
$33.00
$35.00
$37.00
$39.00
$41.00
$43.00
$45.00
$47.00
$49.00
$51.00
10
/
2
7
/
0
9
11
/
2
4
/
0
9
12
/
2
2
/
0
9
1/1
9
/
1
0
2/1
6
/
1
0
3/1
6
/
1
0
4/1
3
/
1
0
5/1
1
/
1
0
6/8
/
1
0
7/6
/
1
0
8/3
/
1
0
8/3
1
/
1
0
9/2
8
/
1
0
10
/
2
6
/
1
0
11
/
2
3
/
1
0
12
/
2
1
/
1
0
1/1
8
/
1
1
2/1
5
/
1
1
3/1
5
/
1
1
4/1
2
/
1
1
5/1
0
/
1
1
6/7
/
1
1
7/5
/
1
1
8/2
/
1
1
8/3
0
/
1
1
9/2
7
/
1
1
10
/
2
5
/
1
1
11
/
2
2
/
1
1
12
/
2
0
/
1
1
1/1
7
/
1
2
2/1
4
/
1
2
3/1
3
/
1
2
4/1
0
/
1
2
5/8
/
1
2
6/5
/
1
2
7/3
/
1
2
7/3
1
/
1
2
8/2
8
/
1
2
9/2
5
/
1
2
10
/
2
3
/
1
2
Se
c
u
r
i
t
y

P
r
i
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e

ID AC OR P, Inc. (ID A) 3-yr. Price PerformanceID AC OR P, Inc. (ID A) 3-yr. Price Performance
Date
Date Publication Price ($) Rating Code Val. Rng. Low Val. Rng. High Close Price ($) 10/27/2009 Kalton
10/27/2009 NA 2 29.00 30.00 28.75
z 11/10/2009 29.52 2 30.00 31.00 29.52
z 12/14/2009 31.18 2 32.00 33.00 31.54
z 2/25/2010 33.94 2 35.00 36.00 33.89
z 8/6/2010 35.75 2 36.00 37.00 36.05
z 10/29/2010 37.00 2 38.00 39.00 36.80 cz 11/15/2010 36.34 1 40.00 41.00 36.52
z 2/9/2011 38.22 1 41.00 42.00 38.05
z 5/5/2011 38.91 1 42.00 43.00 38.91
z 7/19/2011 39.83 1 43.00 44.00 39.84
z 8/4/2011 36.47 1 41.00 42.00 36.47
dz 10/24/2011 40.51 2 42.00 43.00 40.43
z 11/4/2011 41.33 2 43.00 44.00 40.43 z 1/3/2012 42.41 2 44.00 45.00 41.80 „ 2/22/2012 Akers
c 4/27/2012 40.45 1 44.00 45.00 40.86
z 6/20/2012 41.00 1 45.00 46.00 41.00
z 8/3/2012 42.53 1 45.00 47.00 42.67
Source: Wells Fargo Securities, LLC estimates and Reuters data
Symbol Key Rating Code Key
d Rating Downgrade ‹ Initiation, Resumption, Drop or Suspend 1 Outperform/Buy SR Suspended c Rating Upgrade „ Analyst Change 2 Market Perform/Hold NR Not Rated
z Valuation Range Change ˆ Split Adjustment 3 Underperform/Sell NE No Estimate Additional Information Available Upon Request

I certify that:
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issuers discussed; and
2) No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed
by me in this research report.

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ƒ IDACORP, Inc. currently is, or during the 12-month period preceding the date of distribution of the research report was, a client
of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided investment banking services to IDACORP, Inc.
WELLS FARGO SECURITIES, LLC
IDACORP, Inc. EQUITY RESEARCH DEPARTMENT

5

ƒ IDACORP, Inc. currently is, or during the 12-month period preceding the date of distribution of the research report was, a client
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ƒ IDACORP, Inc. currently is, or during the 12-month period preceding the date of distribution of the research report was, a client of Wells Fargo Securities, LLC. Wells Fargo Securities, LLC provided nonsecurities services to IDACORP, Inc.
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Inc. in the past 12 months.

IDA: Risks to our valuation include project delays/cancellations, negative regulatory developments and economic weakness.

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STOCK RATING
1=Outperform: The stock appears attractively valued, and we believe the stock's total return will exceed that of the market over the
next 12 months. BUY
2=Market Perform: The stock appears appropriately valued, and we believe the stock's total return will be in line with the market
over the next 12 months. HOLD
3=Underperform: The stock appears overvalued, and we believe the stock's total return will be below the market over the next 12
months. SELL
SECTOR RATING
O=Overweight: Industry expected to outperform the relevant broad market benchmark over the next 12 months. M=Market Weight: Industry expected to perform in-line with the relevant broad market benchmark over the next 12 months.
U=Underweight: Industry expected to underperform the relevant broad market benchmark over the next 12 months.

VOLATILITY RATING
V = A stock is defined as volatile if the stock price has fluctuated by +/-20% or greater in at least 8 of the past 24 months or if the
analyst expects significant volatility. All IPO stocks are automatically rated volatile within the first 24 months of trading.

As of: November 1, 2012
48% of companies covered by Wells Fargo Securities, LLC
Equity Research are rated Outperform.
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49% of companies covered by Wells Fargo Securities, LLC
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2% of companies covered by Wells Fargo Securities, LLC
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WELLS FARGO SECURITIES, LLC
Utilities EQUITY RESEARCH DEPARTMENT

6

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SECURITIES: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE