HomeMost PopularInvestingHere's How to Play Xcel Energy (XEL) Ahead of Q1 Earnings

Here’s How to Play Xcel Energy (XEL) Ahead of Q1 Earnings

Actionable Trade Ideas

always free

Xcel Energy XEL is scheduled to release first-quarter 2024 earnings on Apr 25, before market open. The company delivered a negative earnings surprise of 3.15% in the last quarter.

The Zacks Consensus Estimate for first-quarter earnings is pegged at 82 cents on revenues of $4.02 billion.

Per our proven model, stocks with a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) are likely to beat on earnings. At present, Xcel Energy has an Earnings ESP of -6.75% and a Zacks Rank of 3. Hence, it is presumed that Xcel Energy is unlikely to beat estimates this earnings season.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Xcel Energy Inc. Price and EPS Surprise

Xcel Energy Inc. Price and EPS Surprise

Xcel Energy Inc. price-eps-surprise | Xcel Energy Inc. Quote

Can Xcel Energy Still Ride on Rising Customer Volumes?

Xcel Energy has been efficiently serving its electric and natural gas customers in eight states of the United States. High quality and reliable services provided by the company attract new customers and allow Xcel Energy to serve an expanding electric and natural gas customer base. The company registered an increase in electric and natural customers in 2023, accompanied by a surge in demand. Xcel Energy is expected to add more customers in 2024, while its electric sales volumes are expected to improve by 2% from 2023 levels.

The company has been investing steadily and has a long-term investment plan to further strengthen its transmission & distribution operation, focus on carbon-free electricity generation, and improve the reliability of electricity generation. It aims to spend $39 billion during the 2024-2028 time frame. Xcel Energy plans to invest nearly $22 billion in strengthening its electric distribution and transmission operations in the 2024-2028 time period. Almost $5.5 billion will be invested in renewables in the same time frame.

These positive initiatives will assist the company in serving its expanding customer base more efficiently. Courtesy of rising capital investment, the company will also register a strong CAGR of 9% in the 2023-2028 time period.Β  The new electric and natural gas rate case approval by different commissions also ensures that proper funds are being generated from the capital invested.

However, Xcel Energy’s operations are subject to commodity price fluctuations and other risks associated with energy markets and energy production. Despite the existing fuel recovery mechanisms in most of its service territories, higher fuel costs could significantly impact the results of operations if expenses are not recovered. The still high-interest rates pose a concern for Xcel Energy as it funds a major portion of its long-term projects through borrowings. Β 

Despite the expected near-term earnings miss and some headwinds, it is advisable to hold on to this stock over the long term, given its positive fundamentals and its ability to increase shareholder value by hiking 5-7% of the dividend rate annually, subject to approval from its board.

Stocks to Consider

Investors can consider the following players from the same industry, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Entergy Corporation ETR is likely to come up with an earnings beat when it reports first-quarter earnings on Apr 24. It has an Earnings ESP of +5.71% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ETR’s long-term earnings growth rate is 7.01%. The Zacks Consensus Estimate for first-quarter 2024 earnings per share has moved up by 5.3% in the past 60 days.

PPL Corporation PPL is likely to pull off an earnings beat when it reports first-quarter 2024 earnings on May 1. It has an Earnings ESP of +0.98% and a Zacks Rank #3 at present.

PPL’s long-term earnings growth rate is 6.5%. The Zacks Consensus Estimate for first-quarter 2024 earnings per share has moved up by 2% in the past 60 days.

Exelon Corporation EXC is likely to come up with an earnings beat when it reports first-quarter earnings on May 2. It has an Earnings ESP of +1.41% and a Zacks Rank #3 at present.

EXC’s long-term (three-to-five years) earnings growth rate is 5.69%. The Zacks Consensus Estimate for first-quarter 2024 earnings per share has moved up by 1.4% in the past 30 days.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Where Will Stocks Go…

If Biden Wins? If Trump Wins?

The answers may surprise you.

Since 1950, even after negative midterm years, the market has never had a lower presidential election year. With voters energized and engaged, the market has been almost unrelentingly bullish no matter which party wins!

Now is the time to download Zacks’ free Special Report with 5 stocks that offer extreme upside for both Democrats and Republicans…

1. Medical manufacturer has gained +11,000% in the last 15 years.

2. Rental company is absolutely crushing its sector.

3. Energy powerhouse plans to grow its already large dividend by 25%.

4. Aerospace and defense standout just landed a potentially $80 billion contract.

5. Giant Chipmaker is building huge plants in the U.S.Β 

Hurry, Download Special Report FREE >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Exelon Corporation (EXC) : Free Stock Analysis Report

PPL Corporation (PPL) : Free Stock Analysis Report

Xcel Energy Inc. (XEL) : Free Stock Analysis Report

Entergy Corporation (ETR) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.