Dominion Energy: Analyzing Stock Performance Amidst Market Challenges
Dominion Energy, Inc. (D), with a market capitalization of $45.7 billion, stands out as a key player in the energy sector. The company is responsible for producing, transmitting, and distributing electricity and natural gas across 18 U.S. states. It boasts a diverse electric generating capacity of nearly 29.5 GW and extensive infrastructures that serve approximately 7.5 million customers.
Recent Stock Performance Against Market Trends
Over the past year, Dominion Energy’s shares have slightly outperformed the broader market. The stock has delivered a return of 22.6%, surpassing the S&P 500 Index ($SPX), which gained 21.4%. However, on a year-to-date basis, Dominion’s shares have edged up just over 1%, falling behind the SPX’s 3.1% gain.
The company’s stock performance is also trailing the Utilities Select Sector SPDR Fund’s (XLU) 29.9% return during the same period.
Q3 Earnings: Mixed Results and Caution from Investors
On Nov. 1, Dominion reported adjusted earnings per share (EPS) for Q3 of $0.98, which was above expectations; however, its revenue of $3.9 billion fell short of consensus estimates. This disappointment was compounded by concerns regarding the company’s growing long-term debt, now at $33.8 billion. Dominion also adjusted its full-year EPS guidance to a range of $2.68 – $2.83, with a midpoint of $2.75, slightly below analyst forecasts.
Challenges with Major Projects Affecting Stock Value
Date back to Feb. 4, when the stock took a hit of 4.2% after announcing a 9% increase in costs for the Coastal Virginia Offshore Wind (CVOW) project, raising total expenses to $10.7 billion due to higher mandated network upgrade costs. Investors were also unsettled by a $100 million GAAP charge for unrecovered costs.
Analysts project that for fiscal 2024, which ends in December, Dominion’s EPS could rise by 38.7% year-over-year to $2.76. The company’s history of earnings surprises, however, reveals mixed results: it has beaten estimates in two of the last four quarters while missing in the other two.
Analyst Ratings and Future Outlook
Among the 18 analysts tracking Dominion Energy, the consensus rating is classified as a “Hold,” reflecting three “Strong Buy” ratings and 15 “Holds.”
On Feb. 3, Bank of America Securities analyst Ross Fowler reiterated a “Hold” rating, establishing a price target of $61 for the stock. Currently, Dominion Energy is trading below the average price target of $59.27. The highest forecasted price target stands at $66, suggesting an upside potential of 20.8%.
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 solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
