Jefferies raises DTE Energy stock price target to $143

On Tuesday, analysts at Jefferies updated their financial outlook on DTE Energy (NYSE:DTE), increasing the company’s price target from $129.00 to $143.00, while maintaining a Hold rating on the stock. The adjustment comes as a response to an expansion in multiples and a slight uptick in estimates. According to InvestingPro data, DTE is currently trading at $132.38, near its 52-week high of $133.45, with a market capitalization of $27.4 billion and a P/E ratio of 19.54.

The revised price target by Jefferies reflects a reduced discount applied to DTE Vantage, the company’s non-utility business segment. The discount has been adjusted to -10% from the previous -20%, considering the portion of value attributed to tax credits, which is now excluded from the multiple.

The report also notes that DTE Energy’s updated guidance on equity issuance is anticipated to result in a higher corporate drag, despite a modest improvement in interest rates. This factor is likely to constrain the company’s ability to reach a 15% threshold.

Jefferies acknowledges the premium of +10% for Michigan utilities, which is perceived to fully capture the potential opportunities based on the assumption of robust earned Return on Equity (ROE). The analyst does not foresee a clear path for upside potential following the stock’s recent performance, suggesting that the current market conditions and company prospects are already priced into the stock.

DTE Energy’s stock price target increase by Jefferies is based on a combination of industry factors and the company’s specific financial guidance. The Hold rating indicates that while the analysts see some positive developments in the company’s valuation, they do not recommend a change in investment position at this time. For a deeper understanding of DTE’s valuation and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro, which offers detailed insights into the company’s financial health and market position.

In other recent news, DTE Energy reported a strong financial performance for the fourth quarter of 2024, with revenue reaching $3.43 billion, surpassing the forecast of $3.17 billion. However, the company’s earnings per share (EPS) fell slightly short of expectations, coming in at $1.51 compared to the projected $1.57. Meanwhile, Barclays (LON:BARC) downgraded DTE Energy’s stock from Overweight to Equal Weight, citing concerns about long-term earnings quality and balance sheet management. The price target was also adjusted to $135.00 from $137.00. On the other hand, BMO Capital Markets maintained its Market Perform rating but raised the price target to $135.00, reflecting confidence in DTE Energy’s growth potential.

In regulatory developments, DTE Energy’s Board of Directors approved performance metrics for executive compensation, aligning it with financial and operational performance targets for 2025. Additionally, DTE Energy has set significant investments in renewable energy and grid reliability improvements, planning $10 billion over the next five years. These developments highlight DTE Energy’s strategic focus on sustainable growth and modernization, despite the mixed analyst reviews.

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