Tuesday, BofA Securities updated its outlook on DTE Energy (NYSE:DTE) shares, raising the price target to $116 from $115, while reiterating a Buy rating.
The firm's analysts have adjusted their earnings per share (EPS) estimates for fiscal years 2024 and 2025 from $6.70/$7.14 to $6.71/$7.12, respectively, while keeping the fiscal year 2026 EPS estimate steady at $7.67 per share. These projections align closely with the consensus and take into account actual 2023 results, the latest electric rate case decision in Michigan, and the company's forward guidance.
The firm forecasts a first-quarter 2024 EPS of $1.64 for DTE Energy, an increase from $1.33 in the same quarter of the previous year, but significantly lower than the current consensus of $1.98. The revised price target reflects the current peer group multiple, which stands at 13.6 times for electric and 13.8 times for gas utilities, leading to the updated target of $116 per share.
The continued endorsement of DTE Energy's stock comes with an appreciation of the company's strong EPS growth profile and the positive regulatory environment in Michigan. The analyst's comments highlighted these factors as the basis for the maintained Buy rating, indicating a favorable outlook for the energy company's performance.
InvestingPro Insights
As the financial community digests BofA Securities' updated outlook on DTE Energy, investors may find additional context by considering key data and insights from InvestingPro. DTE Energy is noted to be trading at a low P/E ratio relative to near-term earnings growth, which could indicate that the stock is undervalued given its growth prospects. This aligns with the analyst's optimism about the company's EPS growth profile.
Moreover, DTE Energy has demonstrated stability through its commitment to dividend payments, having maintained them for 54 consecutive years. This track record may appeal to income-focused investors seeking reliable dividend stocks. While the company operates with a significant debt burden and short-term obligations exceed its liquid assets, it is still predicted to be profitable this year, and it has been profitable over the last twelve months. These factors, combined with the positive regulatory environment in Michigan, may contribute to the support for a Buy rating.
To gain further insights into DTE Energy's financial health and stock performance, investors can explore additional InvestingPro Tips by visiting https://www.investing.com/pro/DTE. With the exclusive coupon code PRONEWS24, users can enjoy an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking access to a broader range of investment tips and data. There are 6 more tips available on InvestingPro that could further inform investment decisions regarding DTE Energy.
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