Duke Energy Faces Challenges Despite Positive Long-Term Projections
Headquartered in Charlotte, North Carolina, Duke Energy Corporation (DUK) is a major player in the U.S. utility industry, focusing on energy generation, transmission, and distribution, alongside natural gas services. Its market cap of $86.4 billion positions it as a key player in the sector, providing services to millions across numerous states.
Stock Performance Falls Short of Market Expectations
Over the past year, Duke Energy’s stock has lagged behind broader market trends. Shares have increased by 27.9%, whereas the S&P 500 Index ($SPX) saw a significant rally of 35.7%. In 2024, DUK stock is up 14.7%, while the SPX is up 25.5% year to date.
Comparison with Utilities Sector Shows More Struggles
Taking a closer look, DUK hasn’t performed well compared to the Utilities Select Sector SPDR Fund (XLU), which has experienced a 31.5% gain over the past year. The ETF also boasts a year-to-date return of 23.7%, exceeding Duke Energy’s returns.
Earnings Report Reveals Mixed Results
Duke Energy’s shares dropped by over 2% following its Q3 earnings report on November 7. The company posted an adjusted EPS of $1.62, which was a 16.5% decline from the previous year and fell short of the expected $1.73. On a positive note, total revenue increased by 2% to $8.15 billion, slightly exceeding forecasts of $8 billion. Furthermore, Duke Energy reaffirmed its 2024 adjusted EPS guidance of $5.85 to $6.10, with expectations leaning towards the lower end, and forecasts a 5% to 7% annual growth rate through 2028.
Analyst Expectations for Earnings Growth
For the fiscal year ending December, analysts project Duke Energy’s EPS to grow 7.4% to $5.97 on a diluted basis. The company’s earnings record has had its ups and downs, beating estimates in two of the last four quarters.
Analysts Show Solid Support for Stock
Among the 20 analysts monitoring DUK stock, there’s a strong consensus rating of “Moderate Buy,” supported by 10 “Strong Buy” ratings, one “Moderate Buy,” and nine “Holds.” This outlook is notably more optimistic compared to three months ago when only eight analysts recommended a “Strong Buy.”
Price Targets Indicate Potential Upside
On November 11, RBC Capital analyst Shelby Tucker reiterated a “Buy” rating for Duke Energy, with a price target of $135. This forecast suggests a potential upside of 21.3% from current levels. The mean price target is set at $124.31, indicating an 11.7% increase, while the highest target of $139 suggests an upside potential of 24.9%.
On the date of publication, Rashmi Kumari did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, please view the Barchart Disclosure Policy here.
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