Mizuho maintains Evergy stock Outperform rating with $70 target

On Tuesday, Mizuho (NYSE:MFG) Securities sustained its positive outlook on Evergy (NASDAQ:EVRG), reiterating an Outperform rating and a $70.00 price target. With the stock currently trading at $67.32 and a market capitalization of $15.49 billion, Mizuho’s target suggests potential upside. According to InvestingPro data, the company trades at a P/E ratio of 17.83x. The endorsement follows recent developments in a rate case involving Kansas Central, a subsidiary of Evergy. Analysts at Mizuho have taken a favorable view of the Kansas Corporation Commission (KCC) Staff’s testimony, which recommended a revenue requirement approximately 58% of Kansas Central’s requested amount.

The KCC Staff’s proposal includes a revenue requirement of around $114 million, based on a 9.70% return on equity (ROE), which is lower than Kansas Central’s request for a 10.50% ROE. Additionally, the equity ratio suggested is 48.74%, compared to the approximately 52% sought by Kansas Central, and a rate base of $6.78 billion, slightly higher than the company’s $6.73 billion request.

Mizuho’s analysts interpret these recommendations as a sign of positive regulatory developments in Kansas, which could bode well for Evergy. They believe that the testimony from the KCC Staff indicates an improvement in Kansas’ regulatory climate, which is one of the factors underpinning their Outperform rating. The company has demonstrated strong shareholder returns, maintaining dividend payments for 34 consecutive years with 21 years of consecutive dividend increases. Currently, it offers a dividend yield of 3.97%. For deeper insights into Evergy’s dividend sustainability and growth potential, check out the comprehensive Pro Research Report available on InvestingPro.

The firm’s outlook is also based on the expectation that Evergy will enhance its earnings per share (EPS) growth rate, which currently sits at the upper half of the 4%-6% range. This is in line with the growth rates of Evergy’s midcap utility peers, which are estimated to be between 5%-7%. The potential for Evergy to reach a settlement with the KCC Staff and intervenors by mid-July is also seen as a positive development that could contribute to the company’s performance.

Mizuho’s endorsement reaffirms their confidence in Evergy’s stock and prospects, maintaining the $70 price target previously set for the company’s shares. InvestingPro analysis shows the company maintains a FAIR financial health score, with revenue growing at 6.29% over the last twelve months. Discover more insights and 8 additional ProTips about Evergy’s financial outlook with an InvestingPro subscription.

In other recent news, Evergy reported its Q1 2025 earnings, showing adjusted earnings per share (EPS) of $0.54, which missed the forecasted $0.66. Despite the earnings miss, the company’s revenue surpassed expectations, reaching $1.37 billion against an anticipated $1.16 billion. Evergy has outlined a cautious forward guidance with plans for a $17.5 billion capital investment aimed at driving long-term growth. The company is targeting a 4% to 6% earnings growth through 2029, focusing on expanding renewable energy capacity and enhancing grid reliability.

Additionally, UBS has maintained its Buy rating on Evergy, with a price target of $78. This comes after developments in a Kansas rate case, which UBS views as a positive advancement for the company. The Kansas Corporation Commission Staff has recommended that half of the parent company’s attributable debt be allocated to the utility, affecting Evergy’s equity ratio. This decision is crucial for Evergy as it will impact the company’s financial parameters, including its capital structure and cost of capital. UBS’s continued confidence in Evergy is reflected in its maintained Buy rating and price target, indicating a belief in the company’s investment potential.

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