Julien Dumoulin Smith, an analyst from Jefferies, maintained the Buy rating on Xcel Energy (XEL – Research Report). The associated price target was lowered to $79.00.
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Julien Dumoulin Smith has given his Buy rating due to a combination of factors that highlight Xcel Energy’s growth potential and strategic positioning. The company is expected to achieve a significant increase in its rate base, with a projected compound annual growth rate (CAGR) of approximately 14%, which is notably higher than the disclosed 9%. This growth is driven by an anticipated increase in capital expenditures, potentially reaching $70 billion over five years, compared to the current $45 billion, positioning Xcel Energy as a leader among large-cap utilities.
Additionally, the resolution of wildfire risks and the Marshall Fire litigation are seen as key de-risking events that could positively impact the company’s equity. The anticipated resolution of tax credit transferability issues under the Inflation Reduction Act (IRA) further supports Xcel Energy’s financial outlook. These factors, combined with a strategic plan to expand generation capacity significantly, contribute to the optimistic growth projections and justify the Buy rating, despite the lowered price target reflecting market conditions.
XEL’s price has also changed slightly for the past six months – from $68.910 to $68.800, which is a -0.16% drop .