In a report published Friday, Morgan Stanley analyst Rajeev Lalwani reiterated an Overweight rating on Sempra Energy (NYSE: SRE), but removed the $102.00 price target.
In the report, Morgan Stanley noted, “We remain comfortable with our Overweight rating following yesterday's analyst day that highlighted best in class growth and MLP formation potential. Management updated guidance for 2014-15, and initiated a 2014-18 EPS CAGR of 8-10%. Keeping with prior practice, they also provided 2014-19 guidance to capture the impact of Cameron LNG export, which was unchanged at 9-11%. Of note, however, was a large list of potential incremental opportunities across all businesses and additional clarity around an MLP.
"We continue to expect management to form an MLP at least by 2017, and feel the value of a general partner structure is still not reflected in the stock price.”
Sempra Energy closed on Thursday at $96.20.
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