On Monday, Jefferies has increased the price target for Evergy (NASDAQ:EVRG), a utility company, from $71.00 to $74.00, maintaining a Buy rating on the stock. The adjustment reflects the analyst's optimism about Evergy's earnings growth, supported by the company's latest capital plan and third-quarter performance, alongside messages from the Edison Electric Institute (EEI) conference.
Evergy's updated capital strategy and visible load pipeline are seen as key drivers for the company's earnings per share (EPS) to potentially exceed its 4-6% growth guidance. The management team at Evergy has expressed confidence in reaching the upper half of this forecast range between 2025 and 2029. This outlook has bolstered the firm's stance on the stock.
The analyst noted the importance of stakeholder engagement following Evergy's recent workshop with the Kansas Corporation Commission (KCC) and key intervenors, which focused on the company's capital structure and return on equity (ROE). These interactions are expected to be indicative of Evergy's ongoing progress.
In summary, the firm reiterated its Buy rating for Evergy, signaling a positive perspective on the company's future financial performance. The raised price target to $74.00 is based on the belief that Evergy's strategic initiatives and regulatory engagements will contribute to accelerated EPS growth.
In other recent news, Evergy reported strong Q3 results, with a rise in adjusted earnings per share (EPS) to $2.02, up from $1.88 in the previous year. This increase was credited to demand growth and new retail sales. The company also announced a 4% dividend increase and a $16.2 billion capital expenditure plan through 2029.
Evergy has established significant partnerships with Google (NASDAQ:GOOGL), Panasonic (OTC:PCRFY), and Meta (NASDAQ:META), representing 750 megawatts of load, and a robust pipeline of over 6 gigawatts in potential projects. The company's outlook remains focused on affordability, reliability, and sustainability.
Evergy has reaffirmed its 2024 adjusted EPS guidance range of $3.73 to $3.93 and set its 2025 guidance at $3.92 to $4.12. It also projects a weather-normalized demand growth forecast of 2% to 3% through 2029.
Despite anticipated capacity constraints in the near term, the company has secured significant economic development wins and is negotiating with two new data centers, potentially adding 500 to 1,000 megawatts of load. These are some of the recent developments in the company.
InvestingPro Insights
Evergy's recent positive outlook from Jefferies aligns with several key metrics and insights from InvestingPro. The company's market capitalization stands at $14.78 billion, reflecting its significant presence in the utility sector. Evergy's P/E ratio of 17.36 suggests a reasonable valuation, especially when considering its growth prospects.
InvestingPro Tips highlight that Evergy has raised its dividend for 21 consecutive years, demonstrating a strong commitment to shareholder returns. This aligns with the company's stable financial position and potential for earnings growth, as noted in the Jefferies analysis. Additionally, the stock is trading near its 52-week high, which corroborates the positive sentiment expressed in the article.
The company's revenue growth of 3.18% over the last twelve months and a more robust 8.51% growth in the most recent quarter indicate improving financial performance. This supports the analyst's optimism about Evergy's potential to exceed its 4-6% EPS growth guidance.
Evergy's dividend yield of 4.15% and dividend growth of 8.98% further underscore its attractiveness to income-focused investors. The company's ability to maintain and grow its dividend aligns with the positive outlook on its capital strategy and earnings potential.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights on Evergy's financial health and market position.
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