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Black Hills
(NYSE:BKH)
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Rating:70Outperform
Price Target:
$83.00
â–²(13.67% Upside)
Action:Upgraded
Date:10/08/26
The score is anchored by stable profitability but constrained by leverage and uneven free cash flow. Offsetting this, the stock shows a constructive technical uptrend, valuation is supported by a solid dividend yield and reasonable P/E, and recent updates (reaffirmed guidance plus a major long-term Google data-center contract) improve the growth outlook despite execution and financing risks.
Positive Factors
Regulated utility model
Black Hills’ regulated electric and gas operations provide a durable earnings foundation because commission-approved rates are designed to recover operating costs and invested capital. This reduces exposure to commodity-price volatility and supports relatively predictable cash generation as infrastructure enters the rate base.
Negative Factors
Meaningful leverage
The sizeable debt burden limits financial flexibility relative to equity and leaves Black Hills more exposed to refinancing costs or weaker cash generation. Although leverage metrics remain managed for a regulated utility, elevated debt can constrain capital allocation and increase sensitivity to funding conditions.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulated utility model
Black Hills’ regulated electric and gas operations provide a durable earnings foundation because commission-approved rates are designed to recover operating costs and invested capital. This reduces exposure to commodity-price volatility and supports relatively predictable cash generation as infrastructure enters the rate base.
Read all positive factors
Black Hills (BKH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.91B
Dividend Yield3.59%
Average Volume (3M)1.23M
Price to Earnings (P/E)19.5
Beta (1Y)0.35
Revenue Growth2.51%
EPS Growth0.05%
CountryUS
Employees2,795
SectorUtilities
Sector Strength65
IndustryRegulated Gas
Share Statistics
EPS (TTM)3.98
Shares Outstanding76,253,140
10 Day Avg. Volume1,677,701
30 Day Avg. Volume1,234,615
Financial Highlights & Ratios
PEG Ratio8.50
Price to Book (P/B)1.33
Price to Sales (P/S)2.19
P/FCF Ratio-34.62
Enterprise Value/Market Cap1.77
Enterprise Value/Revenue4.54
Enterprise Value/Gross Profit10.58
Enterprise Value/Ebitda12.27
Forecast
1Y Price Target
$83.75Price Target Upside14.69% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)4.36
Revenue Forecast (FY)$2.43B
Black Hills Business Overview & Revenue Model
Company Description
Black Hills Corporation operates as an American utility firm, delivering both electric power and natural gas through its subsidiaries. Its business is organized into two primary divisions: Electric Utilities and Gas Utilities. The Electric Utiliti...
How the Company Makes Money
Black Hills primarily makes money through regulated utility operations, where revenues are largely determined by state utility commissions under approved tariffs and rate structures rather than by purely market-based pricing. Key revenue streams i...
Black Hills Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call conveys a broadly positive operational and financial story: strong quarter and YTD adjusted EPS growth, a compelling >3 GW large-load pipeline (600 MW in-plan and >2.5 GW in advanced talks), solid capital execution (Lange II on schedule; Ready Wyoming transmission in service), healthy liquidity and credit discipline, and substantial merger progress (6 of 7 approvals). Offsetting items include higher financing and depreciation costs, weather headwinds, one remaining merger approval (Montana) that carries timing risk, near-term refinancing needs ($400M in Jan 2027), and execution/contract risk on very large projects (including refundable customer advances). On balance, the positives (earnings beat, pipeline, merger momentum, strong liquidity and operational execution) outweigh the lowlights.Positive Updates
Strong Quarter and Year-to-Date EPS Performance
Q2 GAAP EPS of $0.50 (included $0.04 of merger costs); adjusted Q2 EPS of $0.54 versus $0.38 in Q2 2025, a ~42% YoY increase. Year-to-date GAAP EPS $2.23 (included $0.10 merger costs); adjusted YTD EPS $2.33 versus $2.24 prior year (~4.0% YTD increase). Reaffirmed 2026 adjusted EPS guidance of $4.25–$4.45 (midpoint implies ~6% growth YoY).
Negative Updates
Higher Financing and Depreciation Costs
Q2 experienced combined higher financing and depreciation headwinds (~$0.12 impact Q2); financing costs were $0.06 higher in the quarter (including ~$0.03 EPS impact from new shares and ~$0.03 of interest including AFUDC). Depreciation increased by ~$0.06 due to new assets. Year-to-date combined higher financing and depreciation costs totaled ~$0.29 per share.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Quarter and Year-to-Date EPS Performance
Q2 GAAP EPS of $0.50 (included $0.04 of merger costs); adjusted Q2 EPS of $0.54 versus $0.38 in Q2 2025, a ~42% YoY increase. Year-to-date GAAP EPS $2.23 (included $0.10 merger costs); adjusted YTD EPS $2.33 versus $2.24 prior year (~4.0% YTD increase). Reaffirmed 2026 adjusted EPS guidance of $4.25–$4.45 (midpoint implies ~6% growth YoY).
Read all positive updates
Company Guidance
Management reaffirmed 2026 adjusted EPS guidance of $4.25–$4.45 (midpoint ~6% growth vs. 2025) and said it is on track to achieve guidance and to deliver in the upper half of its 4%–6% long‑term growth target. Financial targets and liquidity include FFO-to-debt of 14%–15% (100 bps above the 13% downgrade threshold), net debt to total capitalization better than 55%, >$650 million of revolver availability, $50 million of ATM equity issued YTD, and a $400 million 3.15% debt maturity in January 2027 being evaluated for refinancing as the company executes a nearly $1 billion capital plan. Operational and near-term metrics cited include Q2 adjusted EPS of $0.54 (GAAP $0.50 incl. $0.04 merger costs) vs. $0.38 last year and YTD adjusted EPS $2.33 (GAAP $2.23 incl. $0.10) vs. $2.24; $0.21/share in Q2 and $0.45 YTD from new rates/rider recovery; a 99 MW Lange II unit to be in service in Q4; a $350 million Ready Wyoming transmission project placed in service in 2025; a ~600 MW data‑center load in the current plan within a >3 GW pipeline (>2.5 GW actively negotiated, including a 1.8 GW opportunity); LCT‑CAM expected Jan 2027; and a dividend raised in January extending 56 consecutive years with a targeted 55%–65% payout ratio.Black Hills Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
62
Positive
Cash Flow
52
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.30B | 2.31B | 2.13B | 2.33B | 2.55B | 1.95B |
| Gross Profit | 986.80M | 888.70M | 840.40M | 796.40M | 772.80M | 705.50M |
| EBITDA | 850.80M | 827.40M | 785.30M | 738.40M | 709.50M | 648.45M |
| Net Income | 299.00M | 291.60M | 273.10M | 262.20M | 258.40M | 236.70M |
Balance Sheet | ||||||
| Total Assets | 11.04B | 10.87B | 10.02B | 9.62B | 9.62B | 9.13B |
| Cash, Cash Equivalents and Short-Term Investments | 71.50M | 182.80M | 16.10M | 86.60M | 21.40M | 8.92M |
| Total Debt | 4.49B | 4.70B | 4.38B | 4.40B | 4.67B | 4.55B |
| Total Liabilities | 7.01B | 6.96B | 6.44B | 6.31B | 6.53B | 6.24B |
| Stockholders Equity | 3.94B | 3.82B | 3.50B | 3.22B | 2.99B | 2.79B |
Cash Flow | ||||||
| Free Cash Flow | -305.20M | -146.40M | -24.90M | 388.80M | -19.60M | -742.06M |
| Operating Cash Flow | 628.30M | 673.40M | 719.30M | 944.40M | 584.80M | -64.56M |
| Investing Cash Flow | -944.10M | -828.20M | -746.00M | -536.70M | -603.90M | -664.23M |
| Financing Cash Flow | 379.50M | 321.80M | -42.90M | -341.70M | 32.30M | 731.87M |
Black Hills Technical Analysis
Positive
73.02
Price Trends
72.71
Positive
72.69
Positive
72.00
Positive
Market Momentum
1.36
Negative
63.39
Neutral
71.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BKH, the sentiment is Positive. The current price of 73.02 is below the 20-day moving average (MA) of 73.12, above the 50-day MA of 72.71, and above the 200-day MA of 72.00, indicating a bullish trend. The MACD of 1.36 indicates Negative momentum. The RSI at 63.39 is Neutral, neither overbought nor oversold. The STOCH value of 71.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BKH.
Black Hills Risk Analysis
Black Hills disclosed 20 risk factors in its most recent earnings report. Black Hills reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Black Hills Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $5.91B | 19.48 | 7.73% | 3.59% | 2.51% | 0.05% | |
66 Neutral | $5.19B | 14.31 | 14.42% | 3.70% | 7.08% | -11.82% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
64 Neutral | $3.11B | 20.67 | 9.33% | 2.18% | 14.61% | 11.96% | |
60 Neutral | $4.69B | 16.22 | 8.42% | 3.58% | -0.78% | 10.67% | |
58 Neutral | $4.90B | 9.22 | 15.87% | 3.98% | 4.12% | 93.82% | |
57 Neutral | $4.02B | 20.11 | 6.95% | 2.96% | -29.93% | -9.37% |
* Utilities Sector Average
BKH
Black Hills
77.53
15.38
24.75%
CPK
Chesapeake Utilities
130.23
1.11
0.86%
SR
Spire
82.89
-0.60
-0.72%
MDU
Mdu Resources Group
19.10
0.28
1.50%
NJR
New Jersey Resources
52.02
7.63
17.18%
OGS
ONE Gas
75.60
-3.69
-4.65%
Black Hills Corporate Events
Business Operations and StrategyFinancial Disclosures
Black Hills inks long-term power deal with Google
Positive
Oct 6, 2026
On Oct. 6, 2026, Black Hills Corp. announced definitive long-term agreements, effective Sept. 30, 2026, to supply power to Google’s planned data center in Cheyenne, Wyo., through 2048, via a Large Power Contract Services Agreement and a Gene...
Financial DisclosuresM&A TransactionsRegulatory Filings and Compliance
Black Hills Advances Merger with NorthWestern via 8-K Filing
Neutral
Aug 17, 2026
On August 18, 2025, Black Hills and NorthWestern Energy Group entered into a unanimously approved all-stock merger agreement, with Black Hills forming a wholly owned merger subsidiary to combine the two regulated utilities, subject to state commis...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.