Zacks Investment Research downgraded shares of Integrys Energy Group Inc. (TEG) from NEUTRAL to UNDERPERFORM on October 11, 2012, with a target price of $50.00.
We downgrade our recommendation to Underperform from Neutral on Integrys Energy Group as we expect increasing retail competitive pressure in the northeastern US markets and risks from weather variations will weigh on margins. In addition, pending rate case approvals from the North Shore and People Gas business units could lead to lag in top-line growth. Pro-environment regulations set by Environmental Protection Agency will also pose serious challenges to the company's growth prospects. Moreover, back-to-back weak financial results in the first and second quarters of 2012 make us skeptical of the company's performance in the upcoming quarters. However, Integrys' involvement in infrastructure expansion projects in Chicago and Columbia power plant could offer some relief in the near term.
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