Brean Capital Adjusts Estimates For Chesapeake Utilities

In a report published Monday, Brean Capital analyst Michael Gaugler reiterated a Hold rating on Chesapeake Utilities Corporation (NYSE: CPK).

In the report, Brean Capital noted, “We have adjusted our forward estimates on Chesapeake Utilities to reflect the recent precedent agreement the company entered into with Calpine Energy Services, LP. Chesapeake will provide natural gas transmission service via its Eastern Shore Natural Gas ESNG) operations to Calpine's Garrison Energy Center in Dover, Delaware under a 20 year agreement. Chesapeake estimates that the financial impact will be approximately $5.8MM in additional margin. Despite the positive impact this additional margin has on our forward estimates, we note that the shares are currently trading at just under 17x our upwardly revised 2016 EPS forecast of $2.95. We consider the shares fairly valued at current levels, and maintain our Hold rating as we look for a more opportunistic entrance point to once again recommend accumulation.”

Chesapeake Utilities closed on Friday at $50.88.