Xcel Energy’s Mixed Performance Sparks Investor Interest
Minneapolis-based Xcel Energy Inc. (XEL) is involved in generating, purchasing, transmitting, distributing, and selling electricity. With a market capitalization of $39.4 billion, the company operates in three segments: Regulated Electric Utility, Regulated Natural Gas Utility, and All Other.
Xcel Energy Trails Broader Market Gains
Over the past year, XEL has not kept pace with the overall market. The stock has risen by 10.9% year-to-date and 16% over the past 52 weeks, while the S&P 500 Index ($SPX) has seen gains of 25.8% in 2024 and 35.9% over the previous year.
Utilities Sector Comparison
When compared to the Utilities Select Sector SPDR Fund (XLU), which soared 25.4% in 2024 and 31.6% over the last year, Xcel’s performance appears diminished.
Recent Earnings Report and Stock Reaction
On October 31, Xcel’s stock climbed about 6% despite the company missing Wall Street’s earnings and revenue forecasts for Q3. Total operating revenues decreased 49 basis points year-over-year to $3.6 billion, falling short of expectations by 8.1%. Although its non-GAAP adjusted earnings per share (EPS) grew by 1.6% year-over-year to $1.25, they still missed analysts’ forecasts by 3.1%. However, the company reaffirmed its full-year 2024 adjusted EPS guidance at $3.50 to $3.60 and projected $3.75 to $3.85 for 2025, which restored some investor confidence. Xcel is also poised to benefit from new customer growth and increased demand from data centers, boding well for future performance.
Analyst Expectations and Buy Ratings
For fiscal year 2024 ending in December, analysts anticipate nearly 6% growth in adjusted EPS to $3.55. Xcel’s earnings history has been mixed; it has missed Wall Street’s bottom-line estimates in three of the last four quarters, outperforming only once. Despite this, XEL holds a consensus “Moderate Buy” rating among analysts, with nine suggesting a “Strong Buy” rating and seven endorsing a “Hold.”
Analyst Ratings and Price Targets
On November 1, KeyBanc analyst Sophie Karp maintained an “Outperform” rating on XEL, raising the price target to $74. Currently, Xcel’s mean price target of $70.67 suggests only a 2.9% premium to the current price, but the highest target of $78 implies a potential upside of 13.6%.
On the date of publication, Aditya Sarawgi 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 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.
