HALISTER1: Utilities Sector ‘Significantly Overvalued,’ Bernstein Says

Utilities Sector ‘Significantly Overvalued,’ Bernstein Says

(Bloomberg) -- U.S. regulated utilities now “significantly overvalued,” Bernstein analyst Hugh Wynne writes in note, citing preferred sector valuation models.
  • Historical relationship between regulated utilities’ forward earnings yield and yield on Moody’s corporate Baa index indicates group now 11% overvalued
  • Investors should underweight regulated utilities if they expect sharp selloff in U.S. equities to have ended and equity market volatility likely to subside
  • Ratings: Outperform on DUK, EIX, PCG; Market perform AEP, D, EXC, FE, NEE
  • NOTE: Earlier, Oppenheimer technical analyst reversed downbeat call on utilities, upgrading sector to market weight; MKM recommended buying water utilities
  • NOTE: Feb. 16, Morgan Stanley strategist upgraded utilities sector to overweight to hedge interest rate bet in financials
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
EIX US (Edison International)
DUK US (Duke Energy Corp)
PCG US (PG&E Corp)

People
Hugh Wynne (Sanford C Bernstein & Co Inc)

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