BofA upgraded shares of Consolidated Edison (NYSE:ED) to Buy from Neutral, lifting the price target from $92 to $103 in a note to clients on Friday.
Analysts told investors that the regulatory de-risk opens up the opportunity for a further re-rating of the utility holding company.
"The New York State Department of Public Service (DPS) approved the Joint Proposal (JP) settlement for the electric and gas rate cases of the Con Edison Company of New York (CECONY) at its July 20 open meeting. The settlement provides rate certainty and a regulatory de-risk through 2025," the analysts explained.
They added that "investors have expressed concern over the status of CECONY's JP, which was announced in February but required DPS sign-off for rates to be effective."
"The stock has de-rated approximately 5% vs. the peer group since May as a result. Concerns largely centered around the possibility that the DPS may reject or modify the JP, resulting in lower capital and earnings for CECONY. This risk is now off the table with Thursday's approval," said the analysts.