Surprise delay, financing of Atlantic Coast Pipeline slams Duke shares – Duke Energy Corporation (NYSE:DUK)

Duke Energy (NYSE:DUK) closed -2.8% in today’s trade to its lowest in nearly three months after saying it would delay operations on the stalled Atlantic Coast Pipeline to 2022 and offer $2.5B in new shares to cover costs.

After DUK previously said it did not expect to issue additional stock for the project, the sudden reversal – which was announced following its Q3 earnings release – caught investors by surprise, Edward Jones analyst Andy Smith tells the Charlotte Business Journal.

In its earnings conference call, company execs emphasized DUK’s commitment to maintaining its strong credit rating as a key part of the decision.

CEO Lynn Good said DUK was looking at issuing the additional shares opportunistically, with the majority coming at the end of 2020.

Smith notes investors never like to see large stock offerings, and that they likely would prefer to see some asset sales; the analyst says the most likely candidate would be DUK’s commercial renewables business.

DUK owns 47% of the proposed $7.8B Atlantic Coast project, which is currently held up in the courts; Dominion Energy (NYSE:D), which owns 48% of the project, has not made any announcement about issuing stock to cover its costs.

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