DTE Energy (DTE) has a mixed outlook at the moment, and Zacks analyst Jon Kolb is concerned about its earnings growth potential. Therefore, the company remains a Hold, but does have a number of positives for the long-term. Get an in-depth analysts of DTE here:

Over the long-term, DTE Energy (DTE) is expected to benefit from regulated rate hikes at its core electric and gas operations, improved performance at its power and industrial project segment and from earnings accretive capital expenditures.

However, higher environmental capex and the temporary rate reduction at Detroit Edison continue to raise concerns over earnings growth potential. Accordingly, with a mixed outlook, we maintain a market-neutral HOLD recommendation on DTE common stock. Price appreciation to our near-term valuation target, combined with the $0.53 per share quarterly dividend which we deem to be sustainable and secure based on the recent dividend increase represents annualized total return potential of 11.1%.

DTE common stock currently trades at 18.4x and 15.5x, respectively, our 2007 and 2008 earnings per share estimates, or roughly in-line with comparable diversified energy utilities and the broader electric power utility industry. Meanwhile, on the basis of relative sales, cash flow, and book value multiples, the stock trades at the lower-end of the range of comparable public companies.

Moreover, DTE common stock yields an attractive above industry average of 4.2% with relatively little downside risk, and therefore, we believe the stock offers a relatively attractive valuation for conservative, income-seeking investors. In other words, the above-average yield should provide downside risk to the share price, going forward, while realization of continued earnings growth through 2008 should provide for modest multiple expansion and price appreciation. Fundamentally, DTE has a good record of reasonable regulatory decisions and with respect to the non-regulated side of the business, management continues to capitalize on its marketing and technical skills, combined with geographical opportunities in coal, gas, and power investments, in addition to new renewable energy projects in Michigan.

Accordingly, we maintain a market-perform Hold rating on DTE common stock with a six-month target price of $52.00, or 19.0x and 16.0x, respectively, our 2007 and 2008 EPS estimates. Price appreciation to our near-term valuation target, combined with the recently increased $0.53 per share quarterly dividend which we deem to be sustainable and secure based upon the recent dividend hike at year-end 2006 and projected EPS growth through 2008 represents annualized total return potential of 11.1%.

Read the full analyst report on DTE