With OGE Energy Corp (NYSE: OGE) shares up about 13 percent since Goldman Sachs added the stock to its Buy list in January, the firm believes its thesis has played out and a favorable outcome for the stock is priced in at the current valuation.
Goldman Sachs analyst Michael Lapides downgraded OGE from Buy to Neutral.
Goldman Sachs’ initial bullish thesis was based on higher EPS estimates, improved regulatory quality and a free cash flow inflection, analysts led by Lapides said in a note.
Lapides also said the potential for a rate case settlement – another core drive of the firm’s January upgrade - in Oklahoma could indicate a “more constructive” regulatory environment.
Now, the firm’s thesis appears to have played out and is reflected in current valuation, said Lapides.
“We view the favorable outcome as already priced in as we believe that the current valuation already gives some credit for an improved regulatory quality in OK," the note said.
At time of publication, OGE shares were trading up less than 1 percent at $35.20.
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Latest Ratings for OGE
|Jun 2018||Goldman Sachs||Downgrades||Buy||Neutral|
|Jun 2018||Bank of America||Maintains||Buy||Buy|
|Feb 2018||UBS||Initiates Coverage On||Neutral|
View More Analyst Ratings for OGE
View the Latest Analyst Ratings
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