Credit Suisse upgraded TXU (TXU
) to outperform from neutral, after the company said it would invest $10 billion in power generation in Texas.
Analyst Dan Eggers says the utility announced plans to spend $6.7 billion to construct an additional 6400 MW of coal generation in Texas on existing TXU generation sites. It also plens to spend another $1 billion on environmental and renewable projects. He says the company previously announced $2.3 billion of capex for Oak Grove and Sandow projects. He says today's announced program still has work ahead, but should add $5+ of value using mid-cycle gas prices. He believes additional value will be identified as the plan is digested. He raises his $56 stock price target to $59.