JPMorgan Chase & Co said that US power companies may raise their 2010 earnings forecasts on increasing electricity demand, driven by hot weather and expanding manufacturing.

Mr Andrew Smith, an analyst at JPMorgan in Houston, said that "Power demand continues to experience a healthy rebound as industrial demand continues to improve."

Mr Smith said top picks to gain from the improving outlook include New Jersey based NRG Energy Inc, the second largest power producer in Texas. CenterPoint Energy Inc, the Houston area's electricity distributor and CMS Energy Corporation, Michigan's second largest utility owner, have attractive dividend yields and trade at low valuations relative to other regulated utility companies.

The analyst has overweight ratings on all three stocks. US power companies will raise 2010 profit forecasts by 3% to 5% following their third quarter earnings reports.

(Sourced from www.bloomberg.net)