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On Wednesday, Jefferies analyst Julien Dumoulin-Smith adjusted the price target for Alliant Energy stock (NASDAQ:LNT), reducing it to $66 from the previous $69, while reaffirming a Hold rating on the shares. The revision reflects a mix of growth opportunities and challenges facing the company.
Dumoulin-Smith highlighted that Alliant Energy's load growth opportunity could potentially drive its earnings per share (EPS) compound annual growth rate (CAGR) above 7% by the year 2030. Additionally, the expansion of the company's credit facility was seen as a sign of confidence in its financial health.
Despite these positive factors, Alliant Energy faces headwinds from rising interest rates, which could dampen growth. The analyst also noted that there are uncertainties related to the Inflation Reduction Act (IRA) and wind generation that warrant monitoring. Furthermore, the upcoming Wisconsin Power and Light (WPL) rate case is an important event on the horizon for the company.
Alliant Energy's stock is currently trading at an 8% premium compared to its peers. This valuation is viewed as fair, especially considering the evolving regulatory environment and the expectation that the company's management will continue to exercise conservatism in its strategic decisions.
The Hold rating suggests that while there may be limited upside potential for Alliant Energy's stock, the current price reflects a balanced view of the company's prospects and risks. Investors are advised to monitor the aforementioned factors that could influence the stock's performance in the future.
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