Ameren’s Stock Struggles Amid Market Gains
Ameren Corporation (AEE), based in Saint Louis, Missouri, is involved in generating and delivering electricity, as well as distributing natural gas. Currently valued at $24.4 billion, the company produces nearly 10,200 megawatts of electricity and manages over 7,500 miles of transmission lines.
Stock Performance Misses Broader Market
Over the past year, AEE has significantly lagged the broader market. During this period, AEE’s stock has risen by 16%, while the S&P 500 Index ($SPX) has climbed by about 32.3%. In 2024, AEE’s stock saw a 24% increase, trailing behind the SPX, which increased by 24.7% over the same time frame.
AEE Falls Short of Utilities ETF
When compared to the iShares U.S. Utilities ETF (IDU), AEE’s performance is even less impressive. The ETF has surged approximately 28.2% in the past year and achieved a 24.6% gain on a year-to-date basis, outpacing AEE’s returns.
Challenges Impacting Financial Performance
AEE’s underperformance is partly due to a reduction in the allowed return on equity for 2024, as indicated in a recent multi-year rate plan. The introduction of new delivery service rates has also posed challenges, negatively affecting the company’s financial results.
Q3 Performance and Analyst Outlook
On November 6, AEE reported modest gains following its Q3 results. The adjusted earnings per share (EPS) of $1.87 fell short of Wall Street’s expectation of $1.91. The revenue for the quarter was $2.17 billion, below the forecast of $2.21 billion. AEE anticipates a full-year adjusted EPS between $4.55 and $4.69.
For the current fiscal year ending in December, analysts predict a 5.3% increase in AEE’s EPS, expecting it to reach $4.61 on a diluted basis. However, the company’s earnings history shows disappointment, having missed consensus estimates in three of the last four quarters, with only one occasion of exceeding forecasts.
Analyst Ratings and Price Targets
Among the 16 analysts covering AEE, the general consensus is a “Moderate Buy.” This includes nine “Strong Buy” ratings, six “Holds,” and one “Strong Sell.” This sentiment has improved from two months ago, where six analysts had rated it as a “Strong Buy.”
On November 8, Durgesh Chopra from Evercore ISI retained a “Hold” rating on AEE, setting a price target at $89. The average price target of $89.78 is slightly above AEE’s current price levels, while the highest target of $98 suggests potential upside of 9.2%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
