With a market capitalization of around $31 billion, WEC Energy Group, Inc. (WEC) serves as a diversified energy provider, delivering regulated natural gas and electricity alongside renewable energy services across the United States. Established in Milwaukee, Wisconsin, the company manages extensive infrastructure, encompassing various sources of power generation and natural gas distribution.
Stock Performance: A Mixed Bag
Over the past 52 weeks, WEC’s stock performance has lagged behind the overall market. While WEC stock has increased by 20.3%, the broad S&P 500 Index ($SPX) has surged 30.4% during the same period. In 2024, shares of WEC have rebounded by 16.4%, but this still trails SPX’s 23.1% year-to-date increase.
Furthermore, WEC’s performance has not kept pace with the Utilities Select Sector SPDR Fund’s (XLU) 27% return over the past year and a 24.9% rise year-to-date.
Third Quarter Results: A Mixed Outlook
Despite exceeding Q3 adjusted EPS expectations with a result of $0.82, WEC Energy’s shares experienced a slight decline on October 31. The company reported revenue of $1.9 billion, falling short of analysts’ forecasts and showing a 4.8% decrease compared to the previous year. This decline raised concerns over demand, particularly among large commercial and industrial clients, with total electric sales volume dropping 5.2%. Earnings fell by 18% from the same quarter last year, along with a rise in interest expenses of 12.1%, adding to worries about ongoing cost pressures.
For the current fiscal year concluding in December, analysts forecast a 5.2% growth in EPS year-over-year, bringing it to $4.87. Notably, WEC has shown a strong earnings surprise history, consistently beating or meeting consensus estimates in the last four quarters.
Analysts Weigh In
Among 17 analysts covering WEC, the consensus rating is currently a “Hold.” This includes four “Strong Buy” ratings, ten “Holds,” one “Moderate Sell,” and two “Strong Sells.”
On November 8, Argus analyst Marie Ferguson updated WEC Energy’s price target to $105, maintaining a “Buy” rating. She cited the company’s 2024 guidance, expected earnings growth, favorable regulatory conditions, and substantial investments in renewable energy as key factors for optimism.
As of now, WEC shares are trading above the average price target of $97.37. The highest target among analysts stands at $108, suggesting a potential upside of 10.2%.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. For more details, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
