As South Carolina politicians amp up the vitriol following Scana’s SCG July 31 decision to stop construction of the two new units at the V.C. Summer nuclear plant, we reaffirm our $64 fair value estimate and narrow moat and stable moat trend ratings for the utility. We anticipated this backlash and raised our fair value uncertainty rating to medium from low two weeks ago.
We think the swoon in Scana’s stock offers a buying opportunity below $58 per share. The stock finished last week below our fair value estimate for the first time since mid-2015 after giving up the 10% rally that briefly followed its abandonment decision. Scana is down more than 17% year to date, while the Morningstar U.S. utilities index is up 11%, excluding dividends.
Travis Miller does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.