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On Wednesday, Jefferies analyst Julien Dumoulin-Smith reiterated a Buy rating on shares of OGE Energy (NYSE:OGE), with a steady price target of $49.00. The stock, currently trading at $44.11 and near its 52-week high of $44.41, appears slightly overvalued according to InvestingPro analysis. Dumoulin-Smith’s outlook for the company is based on several growth drivers he anticipates will propel the firm’s earnings per share (EPS) compound annual growth rate (CAGR) to the higher end of the 5-7% range, potentially even surpassing it in the long term.
The analyst’s forecast includes expectations of significant investments in various projects. These include an estimated $1.6 billion for a Request for Proposal (RFP), around $600 million for prospective data center investments, and an additional $266 million for Southwest Power Pool (NASDAQ:POOL) (SPP) transmission initiatives between 2027 and 2029. These investments are expected to contribute to an 8.2% EPS CAGR. For deeper insights into OGE’s investment potential, InvestingPro subscribers can access detailed financial health scores and comprehensive valuation metrics.
Dumoulin-Smith also points to robust sales updates and the positive momentum leading up to the anticipated Integrated Resource Plan (IRP) procurement data, which is expected by mid-2025. He believes these factors will support further growth and provide tailwinds for the company’s load growth.
OGE Energy’s stock performance is expected to reflect the positive outlook shared by Jefferies, with Dumoulin-Smith’s commentary highlighting the firm’s strong sales and the potential for increased investments to drive growth. The analyst’s reiteration of the Buy rating and the $49.00 price target underscores confidence in OGE Energy’s strategic initiatives and their expected contribution to the company’s financial strength and stock value.
In other recent news, OGE Energy Corporation reported its fourth-quarter 2024 earnings, exceeding expectations with an earnings per share (EPS) of $0.50 compared to the forecasted $0.48. The company also outperformed revenue forecasts, posting $760.5 million against the anticipated $670.3 million. OGE Energy’s consolidated net income reached $442 million, marking a 6% increase from the previous year, driven by strong operational performance and strategic initiatives. The company has set its 2025 consolidated earnings guidance at $2.27 per share, with a range of $2.21 to $2.33, representing a 7% increase in the earnings midpoint compared to 2024.
Looking ahead, OGE Energy anticipates an 8.5% weather-normalized load growth in 2025, largely attributed to potential data center opportunities. The company also plans to file for recovery of its generation plans and a general rate review in Oklahoma by mid-year. In terms of analyst activity, firms such as Evercore ISI and Guggenheim Partners have shown interest in the company’s data center opportunities and load growth projections. During the earnings call, executives highlighted their commitment to maintaining a dividend payout ratio of 65-70%.
OGE Energy’s strategic focus includes grid strengthening and customer base expansion, which contributed to its robust performance. The company continues to enhance its services through automation and AI, aiming to improve customer experience while reducing costs. As part of its long-term plan, OGE Energy is focused on reliability, growth, and affordability, aiming for sustained operational success.
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