Duke Energy Corp. (DUK) Rating Buy

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					Duke Energy Corp.
     (DUK)
   Rating: Buy

 Patrick Matchell Fall 2005
       Company Overview
Company is comprised of 6 divisions
– Franchise Electric (34%)
– Natural Gas Transmission (32%)
– Duke Energy North America (DNEA) (13%)
– Field Services (50 / 50 JV) (12%)
– International Energy (6%)
– Crescent Resources (3%)

  % = percent of total assets
     Business Environment
Still recovering from Enron collapse and
deregulation.
Consolidation to increase due to repeal of
Public Utility Holding Company Act of
1935.
Industry wide repair of highly leveraged
balance sheets.
        Current Events
June 2005 -
  Announced merger with Cinergy
July 2005 -
  Energy Bill passed allowing over
  $14 billion in tax credits
July 2005 -
  Duke power customers set record for
  use of electricity
     Investment Highlights
Growth rate for next quarter is at 56.5%
– Industry average at 6.8%
Increased dividend by 13% in June
– Yield currently over 4%
Over $1 billion in cash reserves
Selling assets with high risk and negative
returns (DENA Segment)
Continuing to acquire
 More Investment Highlights
Upward revision of earnings
– Revised EPS of $1.65 from $1.60
Increasing liquidity by repaying LTD
Leader in low carbon technologies

5 Star S&P Rating
        Key Price Drivers
Q3 Earnings results
Price of DENA asset sales
Completion of Cinergy merger

Further strategic acquisitions
IPO of master limited partnership

Impact from Hurricanes
Technical Analysis
               Entry / Exit
 Entry price: between $27.50 – 28.50
 Entry time: next 10 -15 days; before earnings

Target Price (12 Month): $35 - $36
(estimated 2006 EPS $1.75 x 20 P/E Multiple)

Holding Period Return: Approximately 29.5%
                       (including dividends)