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On Friday, Mizuho (NYSE:MFG) Securities maintained its Outperform rating on Xcel Energy (NASDAQ:XEL) and raised the price target to $74.00 from the previous $70.00. The utility giant, with a market capitalization of $40.5 billion, saw this adjustment despite first-quarter earnings falling short of market expectations. The company reported earnings of $0.84 per share, below the consensus estimate of $0.92. According to InvestingPro data, four analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company’s outlook. According to Mizuho’s analyst, the shortfall was primarily due to timing issues related to the recovery of fuel and purchase power costs, which are anticipated to be recouped later in the year.
Xcel Energy’s stock concluded the day lower, which was attributed to the earnings miss, growing concerns over transferability, and an escalation in the minimum projected liabilities from the Smokehouse Creek Fire. Nevertheless, Mizuho reaffirmed its positive outlook for Xcel Energy, projecting that the company would achieve results in the upper half of its 6-8% earnings per share compound annual growth rate (EPS CAGR) forecast.
The firm’s analysts believe that Xcel Energy’s shares, currently trading at approximately a 2.5% price-to-earnings (P/E) discount, have the potential to re-rate to a mid-single-digit premium. The revised price target of $74 reflects the firm’s confidence in the company’s performance and is based on current market multiples. Despite the challenges faced in the first quarter, Mizuho’s stance indicates an expectation of a strong recovery for Xcel Energy throughout the year.
In other recent news, Xcel Energy reported its first-quarter 2025 earnings, which did not meet analysts’ expectations. The company announced an earnings per share (EPS) of $0.84, falling short of the projected $0.93. Additionally, revenue for the quarter was $3.91 billion, slightly below the anticipated $3.93 billion. Despite these results, Xcel Energy reaffirmed its full-year 2025 earnings guidance, projecting an EPS range of $3.75 to $3.85. The company continues to focus on investments in renewable energy and infrastructure improvements. Analysts noted Xcel Energy’s ongoing challenges with higher operational and maintenance expenses, as well as rising interest and depreciation costs. Furthermore, the company is navigating regulatory outcomes and tariff impacts, which remain areas of concern. Xcel Energy is also actively engaging in wildfire mitigation efforts and related litigation, showing progress in settling claims and managing liabilities.
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