ESE, ELT And PWR Highlighted In Deutsche Bank's Utility Capex Analysis

Key takeaways from Deutsche Bank's study of over 90 utilities (representing $63B in annual capex) include:

1) The overall capex outlook for 2011 has improved (+5% Y/Y vs +1% last quarter).

2) The outlook for transmission spending remains largely unchanged (despite some high-profile push-outs).

3) Smart grid momentum has slowed.

“With solid visibility and limited downside risk to the valuation multiple, ESCO (NYSE: ESE) and Elster (NYSE: ELT) should outperform peers in 2011,” Deutsche Bank writes. “We like Quanta Services Inc. (NYSE: PWR) for longer-term oriented investors, but are cautious that estimates are still too high.”

ESCO currently trades at $36.61; Elster trades at $16; and Quanta Services trades at $17.44.