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On Tuesday, Barclays (LON:BARC) analyst Nicholas Campanella revised the price target for Northwestern Corp. (NASDAQ:NWE) shares to $56.00, down from $57.00, while reiterating an Overweight rating on the stock. Campanella's commentary followed the company's fourth-quarter earnings call, which unveiled a long-term earnings per share compound annual growth rate (CAGR) of 4-6%, starting from a $3.40 base for fiscal year 2024. This projection fell short of market expectations, particularly in light of the strong momentum Northwestern had built with its DC customers prior to the call. According to InvestingPro data, the company currently trades at $51.96, with analyst targets ranging from $52 to $68, suggesting potential upside despite the recent guidance adjustment.
Despite the lower-than-anticipated guidance, Barclays sees potential for Northwestern to surpass the growth rate and consensus estimates by 2027 and beyond. The firm also anticipates year-over-year growth in 2025. Campanella noted that Northwestern's stock is currently trading at a 13.6% price-to-earnings (P/E) discount compared to small caps, 20% to large caps, and approximately 1.1 times/1.0 times the rate base on 2026/2027 estimates. InvestingPro analysis confirms the attractive valuation, with the stock trading at a P/E ratio of 14.24 and offering a substantial 5.08% dividend yield. Notably, the company has maintained dividend payments for 21 consecutive years, demonstrating strong commitment to shareholder returns.
Northwestern's long capacity position and its expanding load backdrop are seen as key factors that could address several structural issues that have historically led the company to under-earn. The Barclays analyst remains confident in the company's ability to achieve positive regulatory outcomes. The Montana rate case is identified as the next significant event that could influence Northwestern's execution on its strategic plans.
The Overweight rating maintained by Barclays reflects the firm's positive outlook on Northwestern's stock, suggesting that it may outperform the average return of the stocks that Barclays covers over the next 12 to 18 months. Despite the revised price target, the investment firm's stance indicates a belief in the company's capacity to navigate its current challenges and deliver shareholder value in the longer term.
In other recent news, Northwestern Corp. has been the subject of favorable analyst attention due to its recent business developments. Ladenburg Thalmann has upgraded Northwestern Corp.'s stock from Neutral to Buy, citing the company's plans to commence operations of two new data centers in 2026 and 2027. These data centers, contracted with Atlas (NYSE:ATCO) Power Group and an unnamed developer, are expected to significantly increase energy demand and contribute to Northwestern's growth potential.
In parallel, Northwestern Energy Group has established a 2025 Annual Incentive Plan aimed at offering incentive compensation to officers and eligible employees. The plan, approved by the company's Board of Directors, stipulates eligibility requirements, performance metrics, and payout conditions based on individual and company performance.
Furthermore, Barclays has upgraded Northwestern Corp.'s stock from Underweight to Overweight despite a reduced price target. This adjustment is attributed to Northwestern securing a 50MW data center customer scheduled for 2027, with an expected expansion to 250MW by 2029. The firm anticipates that Northwestern's management can deliver an average earnings per share compound annual growth rate of 5-6%, with potential for further upside from additional data center agreements. These are the recent developments in Northwestern Corp.'s business trajectory.
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