CenterPoint Energy stock price target lowered to $38 at BofA Securities

Investing.com - BofA Securities has lowered its price target on CenterPoint Energy (NYSE:CNP) to $38.00 from $39.00 while maintaining a Neutral rating on the stock. The utility company, with a market capitalization of $23.56 billion, has demonstrated strong performance with a 15.17% year-to-date return. According to InvestingPro analysis, the stock is currently fairly valued.

The firm expects CenterPoint’s second-quarter 2025 earnings per share to reach $0.28, which is 24% below the consensus estimate of $0.37. BofA attributes this difference to elevated operations and maintenance expenses continuing from the first quarter of 2025. Despite these near-term challenges, the company maintains a 55-year track record of consistent dividend payments, currently yielding 2.44%.

BofA Securities believes CenterPoint is likely accelerating vegetation management ahead of hurricane season in Houston. The firm notes that the company has been proactive in communications and preparation regarding the Invest 93L low-pressure system, the first hurricane risk of the season. The company’s historically low price volatility (Beta: 0.56) has helped maintain stability during such seasonal challenges. Get deeper insights into CenterPoint’s risk metrics and 12+ additional ProTips with InvestingPro.

The research firm slightly increased its EPS forecasts for CenterPoint to $1.75 for 2025, $1.88 for 2026, and $2.04 for 2027, citing a mark-to-market adjustment of interest rates.

BofA maintains its Neutral stance on CenterPoint, explaining that the company’s outsized demographic and capital expenditure growth is balanced by a tighter balance sheet compared to peers, which is accurately reflected in the stock’s 12% premium to its peer group.

In other recent news, CenterPoint Energy announced an $800 million public offering of its common stock, with a forward sale agreement involving major financial institutions like Bank of America, Mizuho (NYSE:MFG), and JPMorgan Chase (NYSE:JPM). This offering is part of the company’s broader financial strategy, which includes an 8% increase in its capital plan, amounting to an additional $4 billion. KeyBanc Capital Markets has maintained its Sector Weight rating for CenterPoint Energy, noting the company’s significant growth prospects in the Texas market. Jefferies analyst Julien Dumoulin-Smith has raised the price target for CenterPoint Energy shares to $43.00, citing potential for further capital expenditure. CenterPoint Energy’s financial outlook includes an expected 8.4% compound annual growth rate in earnings per share through 2029. The company has also expanded its partnership with Convey to improve communication with its customers during extreme weather events. Additionally, CenterPoint is monitoring a tropical system in the Gulf of Mexico, expecting minimal impact on its operations. The company has implemented several resiliency improvements to enhance its storm readiness.

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