Harris Nesbitt upgraded TXU Corp. (TXU) to outperform.
The energy services company selected C. John Wilder as president and CEO. Analyst Michael Worms says he believes the management change is positive, and relieves a certain amount of uncertainty that has overhung TXU shares for some time. He notes as CFO of Entergy, Wilder was among the most-respected senior managers in the utility space, and is an excellent choice for TXU.
Worms finds TXU attractive on a valuation basis, with the stock trading at a 14% discount to his industry average multiple. He believes the discounted valuation belies TXU's much improved position within the utility sector. He's keeping the $2.10 2004 earnings per share estimate, and keeping the $2.20 2005 earnings per share. He upped the $24 target to $29.