Dynegy Inc. (DYN) Shares Faulter on FirstEnergy Settlement News


Dynegy Inc. (NYSE:DYN) shares are stumbling this morning after their CEO responded to news of the Public Utilities Commission of Ohio (PUCO) ruling in favor of competitor FirstEnergy.

FirstEnergy has reached an eight-year agreement with PUCO for a power purchase agreement (PPA). The controversial agreement will increase the cost of power for Ohio citizens and businesses, while benefiting FirstEnergy.

Dynegy Inc. (NYSE:DYN) CEO, Robert C. Flexon, had this to say about the discouraging news:

“The fault of FirstEnergy’s inability to compete in Ohio lies with FirstEnergy and it should not be dependent on the citizens and businesses of Ohio to provide a bail-out. Dynegy will pursue all available avenues, including litigation, to prohibit the power purchase agreement from being enacted so as not to compromise the competitive market design, and we strongly encourage the PUCO commissioners to oppose and vote down this adverse anti-market public policy.”

Investors apparently are a bit discouraged on Dynegy’s behalf as well, as the stock has fallen in morning trading. The stock is down 8.94% or $1.24 following the news, hitting $12.68 per share. Approximately 1.77 million shares traded hands. DYN shares have declined 59.02% since May 1, 2015 and are currently downtrending. It has underperformed the S&P500 by 56.23%.

From a total of 9 analysts covering Dynegy (NYSE:DYN) stock, 6 rate it a “Buy”, 0 a “Sell”, and 3 a “Hold”. This means that 67% of the ratings are positive. The highest target price is $44 while the lowest target price is $23. The mean of all analyst targets is $33.19 which is 161.75% above today’s ($12.68) stock price. Dynegy was the topic of 16 analyst reports since August 9, 2015 according to the firm StockzIntelligence Inc. Deutsche Bank maintained shares on November 6 with a “Buy” rating. Citigroup initiated DYN stock in a recent report from September 18 with a “Neutral” rating.

The institutional sentiment increased to 1.27 in Q2 2015. It’s up 0.07, from 1.2 in 2015Q1. The ratio improved, as 27 funds sold all their Dynegy Inc. shares they owned while 66 reduced their positions. 52 funds bought stakes while 66 increased their total positions. Institutions now own 135.78 million shares which is 5.85% more than the previous share count of 128.28 million in 2015Q1.

Vega Energy Gp Llc holds 20.03% of its total portfolio in Dynegy Inc., equating to 1.57 million shares. Venor Capital Management Lp owns 1.66 million shares representing 14.54% of their total US portfolio. Moreover, Teilinger Capital Ltd. has 13.36% of their total portfolio invested in the company, equating to 270,140 shares. The California-based Bocage Capital Llc has a total of 12.16% of their portfolio invested in the stock. Wingspan Investment Management Lp, a New York-based fund reported 896,200 shares owned.