S&P Equity Research Picks ITC Focus Stock of the Week
NEW YORK, Sept. 13 /PRNewswire/ -- ITC Holdings Corp. (ITC: $61) has been picked by Standard & Poor's Equity Research as its Focus Stock of the Week. ITC carries S&P's highest investment recommendation of 5-STARS, or Strong Buy.
"ITC has several transmission projects it is building or developing in several states, and its rates are regulated by the Federal Energy Regulatory Commission on a cost-of-service basis," said Christopher Muir, Utilities Equity Analyst at Standard & Poor's Equity Research. "As an independent transmission company, ITC has allowed rates of return on equity that are higher than integrated competitors. We think the company's fundamentals, growth projects, and ability to raise rates on an annual basis will attract investors to the stock and help drive its valuation higher relative to peers and the shares to steeper levels."
Muir believes ITC's business model provides it with the ability to achieve earnings per share growth much greater than the peer average over the next five years. He sees a favorable regulatory environment and thinks that increases to the company's rate base should also translate into higher earnings. He believes that ITC's balance sheet, while more levered than other utilities, provides it with sufficient financial flexibility to achieve its growth goals.
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S&P Global STARS Distribution
In North America
As of June 30, 2010, research analysts at Standard & Poor's Equity Research Services North America recommended 38.2% of issuers with buy recommendations, 52.2% with hold recommendations and 9.6% with sell recommendations.
In Europe
As of June 30, 2010, research analysts at Standard & Poor's Equity Research Services Europe recommended 35.7% of issuers with buy recommendations, 40.7% with hold recommendations and 23.6% with sell recommendations.
In Asia
As of June 30, 2010 research analysts at Standard & Poor's Equity Research Services Asia recommended 45.3% of issuers with buy recommendations, 48.3% with hold recommendations and 6.4% with sell recommendations.
Globally
As of June 30, 2010, research analysts at Standard & Poor's Equity Research Services globally recommended 38.4% of issuers with buy recommendations, 49.8% with hold recommendations and 11.8% with sell recommendations.
5-STARS (Strong Buy): Total return is expected to outperform the total return of a relevant benchmark, by a wide margin over the coming 12 months, with shares rising in price on an absolute basis.
4-STARS (Buy): Total return is expected to outperform the total return of a relevant benchmark over the coming 12 months, with shares rising in price on an absolute basis.
3-STARS (Hold): Total return is expected to closely approximate the total return of a relevant benchmark over the coming 12 months, with shares generally rising in price on an absolute basis.
2-STARS (Sell): Total return is expected to underperform the total return of a relevant benchmark over the coming 12 months, and the share price is not anticipated to show a gain.
1-STARS (Strong Sell): Total return is expected to underperform the total return of a relevant benchmark by a wide margin over the coming 12 months, with shares falling in price on an absolute basis.
Relevant benchmarks: In North America, the relevant benchmark is the S&P 500 Index, in Europe and in Asia, the relevant benchmarks are generally the S&P Europe 350 Index and the S&P Asia 50 Index.
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SOURCE Standard & Poor's
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