www.jpmorganmarkets.comNorthAmericaEquityResearch15July2019Utilities&Power2Q19Large&Mid-CapEarningsPreviewUtilitiesandPowerChristopherTurnureAC(1-212)622-5696christopher.turnure@jpmorgan.comBloombergJPMATURNURERichardWSunderland(1-212)622-2869richard.w.sunderlandiii@jpmorgan.comPeterGiannuzziJr.(1-212)622-4214peter.giannuzzijr@jpmchase.comJ.P.MorganSecuritiesLLCSeepage66foranalystcertificationandimportantdisclosures.J.P.Morgandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.Key2Qthemesincluderegulatoryactivity(SO,ED,AGR,XEL,CNP),lingeringlegislativeactivity(DUK,FE,EXC),financingclarity(NI,FTSandpossiblyATO),theAtlanticCoastandMountainValleypipelineprojects,thelateAugustPJMRPMauctionandpotentialFERC-relatedactionhere,andpost-legislationCAwildfirecompanyupdates.Thisquarterisgenerallytheleastimpactfuloftheyearforutilities,andweexpectlittlechanceofannualguidancechangesotherthanpotentiallyAGRorFE.Weseeseveralcompaniesfallingnearthebottomendof2019guidanceand/orconsensusbeingtoohighintheabsenceofawarm3Q,includingDUK,SO,D,NI,FTSandAGR.NonethelessweseebothDUKandNIasbeingwellpositionednear-termandintothequarter,andalsofavorCNPhere.DespiteYTDand2Qunderperformance,westillseereasontosellAGR,andseerisknear-termforPEGandFTSshares,andnoteweexpectapoorquarterresultforEVRG.Seeour7/11SectorStrategypieceforourlatestthoughtsonutilityvaluation.Includedaredetailedcommentsandrevised2Q19forecastsforourlargeandmid-capcoverage:AEP,AES,AGR,ATO,CNP,D,DUK,ED,EIX,ETR,EVRG,EXC,FE,FTS,NEE,NI,PEG,SO,SRE,XEL.FavorDUK,NI,CNP:WestillseeriskstotheDUKstoryandseemostoftheYTDunderperformanceasjustified,butthe11%2020P/Ediscounttopeersand4.3%yieldarenoteableinautilitypeergroupperceivedasexpensive.WeseelittlepricedintosharesforpotentialACPconstructionresumptionpostbiologicalopinionnextmonth,AC...
