We are reaffirming our $35 per share fair value estimate and narrow economic moat after PPL PPL reported third-quarter operating earnings per share of $0.59, compared with $0.56 in the year-ago period. Management increased its to 2018 guidance to $2.30-$2.40 per share, up from $2.25-$2.40 per share. We expect to increase our earnings estimate, but near-term changes do not have a material impact on our long-term outlook. Management also reaffirmed its 5%-6% earnings growth and 4% dividend growth targets through 2020, consistent with our forecasts.
While investors appear to be warming to the regulatory and political risk of PPL's U.K. operations, with PPL shares up 20% since its early summer low, we continue to believe the market is pricing in an unlikely scenario for the unit. We continue to forecast a constructive regulatory environment that will support investment and modest growth, with lower rates of return than allowed under the current RIIO-1 period. Management has noted that it is open for strategic options for the unit, but we don't expect any decision until further clarification is received on the U.K. regulatory environment and Brexit discussions.
PPL filed for a rate review in Kentucky at its KU and LG&E subsidiaries, requesting $172 million in rate increases at a return on equity of 10.42%. We forecast a return on equity of 9.7%, consistent with its prior rate case outcome. The rate increase is based on a forward April 2020 test year, with new rates to be effective in May 2019.
For the quarter, earnings benefited from favorable summer weather, aiding results $0.03 per share in the quarter. PPL's core operations remain on track to meet our 5.5% rate base growth expectations.
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