MGE Energy stock rating upgraded to Neutral by Ladenburg Thalmann

Investing.com - Ladenburg Thalmann has upgraded MGE Energy (NASDAQ:MGEE), a $3.05 billion market cap utility company with a 32-year track record of consecutive dividend increases, from Sell to Neutral with a price target of $83.00. According to InvestingPro analysis, the stock is currently trading near its Fair Value.

The upgrade is primarily based on valuation, according to the research firm. Since December 2024, MGE Energy stock has underperformed the UTY index by approximately 23.4%, which has narrowed the relative downside previously highlighted by Ladenburg Thalmann. The stock currently trades near its 52-week low of $82.21, with relatively low price volatility. Get more detailed valuation metrics and 8 additional key insights with InvestingPro.

MGE Energy now trades at 20 times price-to-earnings ratio on Ladenburg Thalmann’s revised 2027 EPS estimate of $4.18, representing a 22.7% premium to the electric group.

When Ladenburg Thalmann initiated its valuation, it assumed the company should trade at a 25% premium to the electric group. The research firm notes that the stock is now in-line with that targeted premium.

At current levels, Ladenburg Thalmann views MGE Energy shares as more fairly valued, supporting the rating change from Sell to Neutral.

In other recent news, MGE Energy announced a 5.6% increase in its regular quarterly dividend, raising it to $0.4750 per share. This change will be effective for shareholders of record as of September 1, 2025, with payments commencing on September 15, 2025. The annualized dividend rate is now set at $1.90 per share, up from the previous $1.80. This marks the 50th consecutive year that MGE Energy has increased its dividend, highlighting a long-standing tradition of dividend growth. The company’s board of directors approved this increase, reflecting their confidence in the company’s financial stability. Investors often view consistent dividend growth as a positive indicator of a company’s financial health. This development is particularly noteworthy for those focused on income-generating investments.

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