Wednesday, Credit Suisse downgraded Pepco Holdings, Inc. (POM) shares to Neutral from Outperform with a price target of $16. Analyst Eggers said that his downgrade is rooted in valuation and his view that sustained outperformance from current levels looks more difficult.
The analyst's prior POM upgrade was based on an attractive relative value, his view that the still compelling dividend yield was safe, and some prospective positive catalysts that could drive value. At this point the analyst has improving clarity on POM catalysts and thinks the stock's valuation is capturing much of this opportunity, reducing room for relative outperformance in minds.
While not crazy about valuation and are of the view that catalysts are better understood at this point, the analyst also appreciates catalysts remain. POM will provide earnings guidance for the first time on the fourth quarter of 2009 call. The analyst thinks this will improve transparency and eliminate the significant estimate dislocation seen for much of 2009.
The analyst said that strategic initiatives around selling Conectiv generation assets and monetizing the PES Retail businesses could help to lessen projected equity raises with additional commentary coming over the next 3 months or so. The analyst sees finding alternative funding options as a high priority for management that could help address another potential overhang.
Currently, POM is up $0.02 or 0.12% and trading at $16.77.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.