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On Monday, Evercore ISI raised the price target for CenterPoint Energy (NYSE:CNP) shares from $37.00 to $41.00, while maintaining an Outperform rating. The utility company, currently trading at $38.19 with a market capitalization of $24.9 billion, has shown strong momentum with a 21% gain year-to-date. CenterPoint Energy reported first-quarter 2025 adjusted earnings per share (EPS) of $0.53, aligning with both the consensus and Evercore ISI’s estimate of $0.52. The company has also confirmed its full-year 2025 EPS guidance range of $1.74 to $1.76, which is consistent with the consensus and Evercore ISI’s projection of $1.75. According to InvestingPro analysis, the stock is currently trading above its Fair Value.
CenterPoint Energy reiterated its goal of achieving a mid-to-high-end annual non-GAAP EPS growth rate of 6-8% through 2030. The company, which has maintained dividend payments for an impressive 55 consecutive years according to InvestingPro, has increased its ten-year capital expenditure (capex) program by $1 billion, bringing the total from $47.5 billion to $48.5 billion for the period from 2021 to 2030. This increase is primarily for incremental electric transmission investments in Houston.
The Public Utility Commission of Texas (PUCT) approved the 765-kV transmission standard at its meeting on April 24, which is expected to provide further upside for CenterPoint Energy. The company also identified at least $3 billion of additional capex opportunities, including $2 billion for electric transmission and $1 billion for gas transmission investments.
CenterPoint Energy plans to fund the $47.5 billion capital investment plan through a combination of asset recycling gross proceeds, estimated at around $1.2 billion, and securitization proceeds, projected to be about $1.8 billion, in 2025 and beyond. These figures do not include the recently announced $1 billion capital increase. The company also expects to finance its investments with $2.75 billion in equity or equity-like proceeds through 2030, with no change to previous plans. The incremental capex is to be funded by 50% debt and 50% equity, which could include common equity and possibly joint stock notes (JSN). CenterPoint Energy has executed $145 million in forward sales through its at-the-market (ATM) program to mitigate the equity needs for 2026.
CenterPoint Energy continues to target a funds from operations (FFO) to debt ratio of 14-15% through 2030, as rated by Moody’s. The trailing twelve months (TTM) FFO to debt ratio stands at 13.9%. The company also expects to achieve an average annual operating and maintenance (O&M) savings of 1-2%. Lastly, CenterPoint Energy updated that the current interconnection queue has grown by approximately 7 gigawatts since the end of 2024, a 20% increase, which bolsters the company’s forecast of 50% load growth by 2031. A new ten-year capex plan, financing strategy, and revised EPS growth compound annual growth rate (CAGR) are set to be unveiled in the third quarter of 2025.
In other recent news, CenterPoint Energy reported its first-quarter 2025 financial results, revealing a revenue of $2.92 billion, which surpassed the anticipated $2.78 billion, marking a positive surprise for investors. Despite a slight miss in non-GAAP earnings per share (EPS) at $0.53 compared to the forecasted $0.55, the company reaffirmed its 2025 EPS guidance, projecting an 8% growth at the midpoint. CenterPoint Energy also announced an increase in its capital investment plan by $1 billion, bringing the total to $48.5 billion through 2030, with a focus on infrastructure improvements and grid resiliency. Following these developments, Scotiabank (TSX:BNS) raised its price target for the company to $40, maintaining a Sector Outperform rating, citing CenterPoint’s strategic positioning and stable regulatory environment. Meanwhile, Mizuho (NYSE:MFG) Securities adjusted its price target to $38, keeping a Neutral rating due to the company’s valuation premium. CenterPoint Energy continues to focus on financing strategies and cost recovery proceedings related to recent storms, including Hurricane Beryl, which is of particular interest to investors. These recent developments highlight CenterPoint Energy’s ongoing efforts to strengthen its financial performance and operational resilience.
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