On Monday, Jefferies updated its financial outlook for IDACORP, Inc. (NYSE: IDA), increasing the price target to $129.00 from the previous $115.00, while keeping a Hold rating on the stock. The firm highlighted IDACORP's distinct performance compared to its small to mid-cap (SMID cap) peers, which was emphasized during a recent meeting at the Edison Electric Institute (EEI).
The analyst pointed to several factors that support IDACORP's positive differentiation. These include a significant rate base growth of 16.9%, with potential to rise to 17.6% due to new generation projects. Additionally, the company is experiencing a solid load growth of 7.7%, excluding the impact from two large data center customers.
The outcome of the rate case is anticipated to bolster the return on equity (ROE) for IDACORP. Furthermore, the company's balance sheet (B/S) is structured in a way that allows for efficient capital expenditure (capex) financing. This financial flexibility is seen as a key advantage for IDACORP as it continues to grow and invest in its operations.
Despite the positive aspects noted by Jefferies, IDACORP's stock currently trades at a premium compared to its peers. The analyst suggests that the current share price already reflects the company’s strong fundamentals. The new price target of $129.00 represents Jefferies' updated valuation of the stock based on the factors discussed.
In other recent news, IDACORP, Inc. has seen a significant upgrade in stock rating from BofA Securities, moving from Neutral to Buy, following the company's third-quarter earnings report. This upgrade is attributed to IDACORP's robust rate base and anticipated EPS growth. The company's five-year load growth forecast has increased to 7.7%, a notable rise from previous projections, with the rate base growth climbing to approximately 17%.
These recent developments also include an increase in IDACORP's third quarter 2024 diluted earnings per share (EPS) to $2.12, up from $2.07 in the same period in 2023. The company now expects its 2024 EPS to fall between $5.35 and $5.45, reflecting a robust customer growth rate of 2.6% and strategic capital investments. Analysts at Jefferies have maintained a Hold rating on IDACORP's stock, raising the company's price target to $115.00 from $112.00.
In terms of future plans, IDACORP aims to increase its capital expenditures by 46% to $1.8 billion over the next five years, with the goal of doubling its net rate base during this period. The company has sought approval for a $99 million rate increase in Idaho for 2025, following the Oregon Commission's approval of a $6.7 million base revenue increase. These plans underscore IDACORP's commitment to growth and operational efficiency.
InvestingPro Insights
IDACORP's strong financial position and growth prospects, as highlighted by Jefferies, are further supported by recent data from InvestingPro. The company's market capitalization stands at $6.24 billion, reflecting its significant presence in the utility sector. IDACORP's revenue growth of 3.55% over the last twelve months aligns with the analyst's observation of solid load growth.
InvestingPro Tips reveal that IDACORP has raised its dividend for 13 consecutive years, demonstrating a commitment to shareholder returns that complements its growth strategy. This is particularly noteworthy given the company's impressive 54-year streak of maintaining dividend payments. The current dividend yield of 2.94% may be attractive to income-focused investors.
The stock's strong performance is evident in its 15.79% price total return over the past three months and its trading near its 52-week high. However, an InvestingPro Tip cautions that the RSI suggests the stock may be in overbought territory, which investors should consider alongside Jefferies' premium valuation assessment.
For those seeking a deeper analysis, InvestingPro offers 11 additional tips on IDACORP, providing a more comprehensive view of the company's financial health and market position.
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