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On Tuesday, Jefferies analyst Julien Dumoulin-Smith increased the price target for CenterPoint Energy shares (NYSE:CNP) to $43.00, up from $42.00, while reiterating a Buy rating on the stock. The utility company, with a market capitalization of $24.63 billion, has demonstrated strong momentum with a 19.9% year-to-date return, though InvestingPro analysis suggests the stock is currently trading above its Fair Value. Dumoulin-Smith highlighted the company’s potential for further upside, which could be revealed during its Analyst Day. The optimism is based on the anticipation of additional capital expenditure, which is believed to potentially exceed the current $2 billion upside case by an additional $3 billion.
CenterPoint Energy’s financial outlook appears promising, with an expected 8.4% compound annual growth rate (CAGR) in earnings per share (EPS) over the next five years, through 2029. This projection is supported by the company’s robust cash flow, which could benefit from the potential sale of further gas Local Distribution Company (LDC) assets and the extension or resale of mobile generation assets in 2030. The company has maintained dividend payments for 55 consecutive years, currently offering a 2.34% yield, demonstrating its commitment to shareholder returns. (InvestingPro subscribers can access 6 additional key insights about CNP’s financial health and growth prospects.)
The analyst also forecasts an improvement in the funds from operations to debt (FFO/D) ratio, which is projected to reach 14.4%, a 60 basis point increase from the 13.8% expected in 2025. These projections do not take into account the potential asset sales mentioned. Trading at a P/E ratio of 25.34x and showing revenue growth of 4.76%, the reaffirmed Buy rating by Jefferies reflects confidence in CenterPoint Energy’s strategic initiatives and financial health.
In other recent news, CenterPoint Energy reported first-quarter 2025 revenue of $2.92 billion, surpassing expectations of $2.78 billion. The company announced a significant $800 million stock offering, aimed at funding general corporate purposes, including potential debt repayment. Analysts have responded to these developments with mixed views; Evercore ISI raised its price target for CenterPoint Energy to $41, maintaining an Outperform rating, while Mizuho (NYSE:MFG) increased its target to $38 but kept a Neutral rating. Scotiabank (TSX:BNS) also raised its target to $40, citing an optimistic outlook on the company’s demand and capital expenditure forecast.
CenterPoint Energy confirmed its full-year 2025 earnings per share (EPS) guidance range of $1.74 to $1.76, aligning with consensus estimates. The company reiterated its goal of achieving a 6-8% annual non-GAAP EPS growth through 2030. CenterPoint Energy has increased its ten-year capital expenditure program by $1 billion, bringing the total to $48.5 billion, primarily for electric transmission investments in Houston. The Public Utility Commission of Texas approved a 765-kV transmission standard, potentially providing further upside for the company.
CenterPoint Energy plans to fund its $47.5 billion capital investment plan through asset recycling and securitization proceeds, with no immediate plans for additional equity issuance. The company is also focusing on grid resiliency and infrastructure improvements, reflecting in its strategic growth plans. These recent developments highlight CenterPoint Energy’s continued efforts to strengthen its financial and operational position.
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