On Thursday, Barclays (LON:BARC) analyst upgraded WEC Energy Group (NYSE:WEC), traded on the New York Stock Exchange under the ticker NYSE:WEC, from Underweight to Equalweight and increased the price target to $93 from the previous $89. This adjustment reflects a more favorable outlook for the company, which currently has a market capitalization of $29.75 billion and shows remarkable stability with a beta of 0.45. According to InvestingPro analysis, the stock appears slightly overvalued at current levels.
WEC Energy Group has recently concluded a significant electric and gas rate case in Wisconsin, with new rates effective as of January 1, 2025. The decision by the commission is anticipated to be a primary contributor to the company’s earnings per share (EPS) guidance for the fiscal year 2025, which was announced on December 5, 2024. The guidance of $5.17-$5.27 per share suggests a 7.6% growth from the midpoint of the FY24 guidance, aligning with the long-term growth rate target of 6.5%, although at the lower end. Notably, InvestingPro data reveals that WEC has maintained dividend payments for 55 consecutive years, with a current attractive yield of 3.8%.
Barclays’ revised rating comes as the firm identifies fewer potential negative catalysts affecting WEC Energy’s performance going forward. The analyst notes that the company’s EPS outlook appears stable. WEC Energy is also benefiting from substantial load growth, which is bolstering its investments in Wisconsin to support economic development along the I-95 corridor. This growth is attributed to various sectors, including AI/data centers, traditional commercial/industrial operations, and the absence of rate case exposure heading into 2025.
The positive developments in the Wisconsin regulatory environment are also highlighted as a factor reducing the perceived risk associated with the regulator. Despite WEC Energy’s shares being considered expensive—trading at a multiple of 16.1 times the estimated 2027 EPS, which is 9.5% above the sector average—Barclays sees a reduced downside risk to the company’s stock multiple. The firm’s investment thesis surrounding WEC Energy Group appears to have largely played out as expected.
In other recent news, WEC Energy Group has been the subject of notable developments. The company reported steady growth in its Q3 2024 earnings, with adjusted earnings of $0.82 per share and reaffirmed its full-year 2024 earnings guidance of $4.80 to $4.90 per share. A significant development was the unveiling of WEC Energy Group’s largest-ever capital plan, amounting to $28 billion over five years, intended to support increased demand and transition towards renewable energy.
In terms of analyst outlooks, BofA Securities upgraded WEC Energy Group’s stock from Underperform to Neutral and increased the price target to $98.00, highlighting the company’s robust capital spending plan and strong balance sheet. BMO Capital Markets also adjusted its outlook on WEC Energy Group, increasing the firm’s price target on the stock to $104.00, reflecting updated analysis of WEC Energy’s financial projections for the years 2024 through 2028.
WEC Energy Group has revised its executive compensation metrics, aligning executive pay with both financial performance and operational and social goals. The company’s long-term earnings per share growth rate target of 6.5% to 7% remains unchanged.
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