Citi opens ‘downside catalyst watch’ on PNM Resources into merger update

Citi opened a “90-day downside catalyst watch” on shares of PNM Resources (PNM). The firm has a Neutral rating on the name with a $43 price target. In the next two months, the Avangrid (AGR) merger will either break which will cause the stock to fall, or the deal will remain in limbo if the court remands it which may or not be positive for the stock depending on specific remand language, the analyst tells investors in a research note. Citi does not think Avangrid will continue to pursue the deal if the court doesn’t remand the case back to the commission. It also doesn’t think we are in an attractive merger market, so it believes investors are unlikely to give PNM credit for a new strategic to emerge overnight.