Andrew Bischof: PPL is a regulated utility trading at a 20% discount to our fair value estimate in an industry we view as currently fairly valued. PPL has two key segments: one in the U.K. and one in the U.S. The international regulated delivery segment operates distribution networks providing electricity service to customers in the U.K. The domestic unit consists of Pennsylvania and Kentucky utilities that are involved in regulated electricity generation, transmission, and distribution.
We believe the market is overly concerned about PPL's exposure to the U.K. The U.K. political environment is increasingly putting pressure on the region's regulatory conditions as concerns around high electricity prices have raised the ire of consumers and politicians.
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Andrew Bischof does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.