- Wells Fargo upgrades WEC Energy (WEC +0.5%) and PG&E (PCG -0.6%) to Overweight with a $93 price target and to Equal Weight with a $12 target, as part of a raft of ratings changes in the utilities sector (XLU, VPU) which now trades at a level relative to the S&P 500 that has not been seen since the early 2000s.
- The sector has underperformed the broader S&P 500 by a wide margin since Pfizer's coronavirus vaccine was announced on Nov. 9, and "while it is difficult to 'fight the tape,' for the first time in several years we see real value in the space," says the Wells analyst team.
- The firm also upgrades Brookfield Renewable Partners (BEP -3.4%) and Brookfield Renewable Corp. (BEPC -5.2%) to Equal Weight from Underweight with respective $42 and $47 price targets.
- At the same time, Wells downgrades South Jersey Industries (SJI -3.7%) to Underweight with a $26 price target, Spire (SR +0.3%) to Equal Weight with a $69 target, and California Water Services (CWT -0.6%) to Underweight with a $53 target.
- Utility company stocks offer a cheap way to plug into the seismic shift away from coal and toward wind and solar power over the next 15 years, according to the latest Barron's cover feature.