On Monday, Jefferies made an adjustment to the price target of PPL Corp (NYSE:PPL), bringing it down to $38.00 from the previous target of $39.00. Despite the reduction, the firm continues to recommend the stock with a Buy rating.
Currently trading at $32.29 and slightly overvalued according to InvestingPro Fair Value metrics, Jefferies sees PPL Corp as a leading investment choice for 2025, driven by an anticipated improvement in earnings per share (EPS) growth.
According to the analyst's assessment, PPL Corp's EPS is expected to see an uptick to 8%, bolstered by a consistent rate base growth of around 8%. With analysts forecasting EPS of $1.71 for FY2024 and a remarkable 54-year track record of consecutive dividend payments yielding 3.19%, this growth is projected to pick up pace heading into the 2030s, as Kentucky focuses on constructing generation facilities to support expansion. The potential addition of more data centers could provide even greater upside potential.
Jefferies highlights that PPL Corp's stock is valued at a modest premium of 2% compared to its peers, coupled with a 3% potential upside relative to the fiscal year 2028 Street consensus. With these factors in mind and a strong YTD return of 23.33%, the firm anticipates that PPL Corp will outshine its competitors in 2025 as the company gains momentum. Discover more insights and 6 additional ProTips for PPL Corp on InvestingPro.
In other recent news, PPL Corporation (NYSE:PPL) reported narrowed ongoing earnings for 2024, with GAAP earnings of $0.29 per share, and ongoing earnings of $0.42 per share. Citi recently updated its outlook on PPL, raising the company's price target to $36.00 while retaining a Neutral rating. BMO Capital Markets, BofA Securities, and Seaport Global Securities have also updated their outlooks on PPL Corp, assigning price targets of $36.00, $35.00, and $39.00 respectively.
These recent developments reflect PPL Corp's strategic focus on significant infrastructure investments and maintaining a strong balance sheet. The company is on track to complete infrastructure improvements worth approximately $3.1 billion and aims for annual O&M savings between $120 million and $130 million. PPL Corp's growth strategy is expected to meet increasing data center demand, despite supply chain constraints.
Seaport Global Securities highlighted PPL's potential to quickly accommodate over 5 gigawatts of in-front-of-the-meter load due to its excess electric transmission capacity. This is due to a recent Federal Energy Regulatory Commission decision that could benefit PPL, considering the company has reported over 8GW of data center load at advanced stages of development within its Pennsylvania zone.
PPL Corp has outlined significant infrastructure investments totaling $14.3 billion from 2024 to 2027. The company also expects 6% to 8% annual growth in earnings per share and dividends through at least 2027. These recent developments indicate PPL's strategy to ramp up generation capacity to meet increasing data center demand. Despite supply chain constraints, the company remains confident in executing its construction plans.
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