NEW YORK (AP) -- A Citi Investment analyst is lifting Consolidated Edison Inc.'s rating and price target, noting that the worst of SuperStorm Sandy-related costs seem to be over and future preparedness efforts are gaining more support.
Shahriar Pourreza of Citi Investment Research boosted ConEd to "Buy" from "Neutral" and increased the utility's price target to $65 from $63.
In a client note, the analyst said that ConEd New York has proposed spending about $1 billion between 2013 and 2016 on programs such as electric distribution, transformers, gas infrastructure and other areas mostly because of damaged incurred by Sandy. Pourreza said that this money is in addition to the average $2 billion a year the company spend on transmission and distribution.
The analyst said that the proposal seems to have the support of the City of New York as well as Mayor Michael Bloomberg's office. The proposal also seems to incorporate small parts of Bloomberg's plans to strengthen and rebuild New York's infrastructure system, which Pourreza said may increase the likelihood of ConEd's proposal being approved.
Pourreza also says that any media scrutiny on the company's Sandy efforts should dissipate soon as a panel put together by Gov. Andrew Cuomo that looked at utilities' response to the storm should report their final findings this month. Pourreza said that, on average, outages from Sandy lasted about four days — with the exception of Westchester County. The analyst feels that the length of the outages was justifiable given the severity of the storm and pointed out that Westchester County had longer outages because many of its power lines are above ground and more susceptible to damage.
A representative for ConEd did not immediately respond to an email seeking comment.
Consolidated Edison shares finished at $57.56 on Thursday. They have traded in a 52-week range of $53.63 to $65.98.