Tuesday, November 2, 2010

DTE Energy (NYSE:DTE) Trading Continues to be Major Concern Says Barclays (NYSE:BCS)

Although DTE Energy (NYSE:DTE) had a decent quarter, Barclays (NYSE:BCS) sees trading to continue to be one of their major concerns.

"DTE reported solid Q3 EPS and tightened their guidance range for 2010: DTE reported Q3'10 EPS of $0.96, in-line with the consensus estimate, and tightened their 2010 guidance range to $3.50-$3.70 from $3.45-$3.80. Rate relief at MichCon, tight cost controls at both utilities, and meaningful improvements at the P&I segment helped results, while another challenging quarter at trading was the biggest concern," said Barclays.

"We are tweaking our '10-'12 estimates to $3.62/$3.72/$3.88 from $3.67/$3.74/$3.92 and adjusting our target to $52. We are embedding $56M in earnings at P&I, flat performance at midstream, and a return to historical contributions by trading of $45M and assuming that the utilities will be able to earn their authorized 11% ROEs."

DTE closed Monday at $45.67, dropping $1.09, or 2.33 percent. Barclays increased their price target from $50 to $52, while maintaining their "Equalweight" on them.

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