TD Waterhouse update this morning Here is a portion of what TDW said. Target price reduced to 3.75.
They are being cautious and conservative. Net asset value of 4.00 suggests any new projects will move this stock higher.
BW has until February 12 to referthis determination to the U.K.
Competition and Markets Authority,should it wish to appeal the
result.This process would likely be complete by August 2015.
We have updated our forecasts based on Ofwat’s determination and
increased the discount rate used in our DCF valuation. The 12% selloff
in Capstone’s share price on Friday was extreme, but BW is an
important value driver for this company. We remain cautious in advance
of this week’s guidance for 2015. We have lowered our target price to
$3.75 from $4.25. We maintain our HOLD recommendation.
Capstone will release its formal guidance for 2015 after market
close on December 18. We believe that Capstone’s previous guidance
for dividends from BW (£30.5 million during AMP6) is likely safe, but
could be contingent on higher leverage at BW.
At the end of Q3/14, Capstone had $36.6 million of cash available
for general corporate purposes; thecompany currently has $45 millio
n of undrawn revolver capacity.Capstone’s share of equity contributions
for its contracted wind projects in the permitting phase totals $30 million–$35 million. Our revised NAV of$4.00 is above our $3.75 target price, but we are comfortable with a discountedtarget price, pending
Capstone’s formal guidance for 2015.