Dynegy Shares Jump Premarket on Upgrade
Tuesday January 10, 9:22 am ET
Dynegy Shares Advance Premarket on Analyst Forecast for Stronger Cash Flow Through 2007
NEW YORK (AP) -- Shares of electric utility Dynegy Inc. advanced in premarket activity Tuesday after an analyst said its stock price doesn't account for projected improvement in earnings and cash flow next year.
JPMorgan analyst Andrew Smith said the firm expects the Houston-based company to generate a 6 percent gain in free cash flow this year, rising to 15 percent in 2007. Dynegy currently has about $1.5 billion in cash after selling its midstream business, toll contracts and West Coast Power joint venture.
The company's strengthening cash flow "highlights the attractiveness of the shares," he said.
Dynegy shares gained 22 cents, or 4.4 percent, in premarket activity. The stock, which has traded in a 52-week range of $3.21 to $5.70, closed Monday at $5.02 on the New York Stock Exchange.
The analyst upgraded the stock to "Overweight" from "Neutral" and forecast a break-even 2006, up from a projected loss of 10 cents per share. Analysts polled by Thomson Financial target, on average, a 2006 loss of 10 cents per share. |
