Goldman Downgrades Sierra Pacific to 'Market Perform'

Analyst Jonathan Raleigh cited the disappointing outcome for its unit, Nevada Power, and its attempt to increase electricity rates

Goldman Sachs Downgraded Sierra Pacific (SRP ) to market perform from market outperform.

Sierra's unit, Nevada Power will be allowed recover $485 million out of $922 millin in deferred energy costs. Analyst Jonathan Raleigh says he is cutting his 2002 EPS estimate to $1.15, and trimming the 2003 estimate to $1.25 to incorporate the impact of unrecoverable power costs, and higher potential costs due to collateral requirements related to S&P's reduction of parent and subsidiary unsecured credit ratings. He says a dividend cut also is possible. Raleigh does not view this as bad enough to force bankruptcy, although near-term liquidity issues must become more transparent; he thinks stock could stabilize at $11-$12.

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