J.P. Morgan Cuts Allegheny Energy to 'Neutral'

Analyst Jim von Riesemann sees lingering financing uncertainties and ongoing operating difficulties, despite the company's proposed finance deal

J.P. Morgan downgraded Allegheny Energy (AYE ) to neutral from overweight.

Analyst Jim von Riesemann says last week the company announced a long-awaited structured financing deal, which initially appeared to stabilize shareholders, in conjunction with the company's projected financials that he originally thought might prove too conservative.

However, in light of disclosures during a conference call, von Riesemann says it now seems that the near-term solvency risk that was present with Allegheny before the structured financing deal has been replaced by lingering financing uncertainties and ongoing operating difficulties. As result, he expects shares will remain listless.

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