Benzinga | Sep 25, 2020 11:39AM EDT

BofA Downgrades Avangrid Ahead Of Analyst Day In November

Avangrid Inc's (NYSE:AGR) stock has a high valuation, despite there being limited catalysts, while high expectations lend downside risk, according to BofA Securities.

The Avangrid Analyst: Julien Dumoulin-Smith downgraded Avangrid from Neutral to Underperform, while lowering the price target from $47 to $46.

The Avangrid Thesis: The company's shares have been trading at elevated levels, despite the persistent sell-off in utilities, Dumoulin-Smith said.

"As we head into AGR's Analyst Day, despite likely additional renewable opportunities, we perceive outsized expectations," he wrote in a note.

The high expectations "yield clear risks into Analyst Day across all future years," the analyst said.

"We point to cautious data points including AGR's withdrawn 2020 guidance as well as historical trends of delays in the Renewables business, amidst the need for newly minted CEO Dennis Arriola to re-establish credibility in earnings estimates and commitment to execution relative to stated targets," he added.

Although Avangrid has been successful in saving the NECEC project, "we perceive renewed ballot concerns to project and ongoing organizational changes as leading to downside bias to ROE expectations," Dumoulin-Smith highlighted.

AGR Price Action: Shares of Avangrid had declined by 0.63% to $48.57 on Friday.