US stock futures muted as rate cut bets wane ahead of Jackson Hole
Investing.com - Mizuho (NYSE:MFG) maintained its Neutral rating and $38.00 price target on CenterPoint Energy (NYSE:CNP), currently trading at $36.50, in a research note released Friday. According to InvestingPro analysis, the utility company, with a market cap of $23.8 billion, is trading slightly above its Fair Value.
The firm acknowledged that CenterPoint continues to execute on its three-year rate base growth of 13% and expects a third-quarter investor event where management will rebase earnings to reflect benefits from CEHE’s $5 billion System Resiliency Plan. The utility provider has demonstrated stability with 55 consecutive years of dividend payments, currently yielding 2.41%.
While Mizuho believes the rebasing should drive a rerating, likely using 2027 as a new anchor year, the firm noted CenterPoint will need a stronger balance sheet to achieve the double-digit P/E premium it seeks.
The stock currently trades at a 6% P/E premium to Mizuho’s revised estimates, with the firm indicating that an LDC sale and a Moody’s outlook change would be necessary for a valuation change.
Mizuho expressed surprise at management’s ability to navigate political fallout from Hurricane Beryl in under six months and noted several regulatory wins in 2025, but maintained that the expected 6-8% EPS growth following the rebase is already priced into the stock.
In other recent news, CenterPoint Energy has received attention from analysts and made strategic moves to enhance its operations. Jefferies has raised the price target for CenterPoint Energy to $43, citing optimism about additional capital expenditures that could exceed current expectations. This comes alongside an anticipated 8.4% compound annual growth rate in earnings per share over the next five years. Meanwhile, BofA Securities adjusted its price target to $38, maintaining a Neutral rating and noting elevated operations and maintenance expenses affecting future earnings projections. CenterPoint Energy has also announced an 8% increase in its capital plan, now totaling an additional $4 billion, with plans to divest its Ohio Gas Local Distribution Company assets to support this expansion. The company is actively monitoring a tropical system in the Gulf, with minimal impact expected, and has prepared by implementing various storm readiness measures. Additionally, CenterPoint has expanded its partnership with Convey to enhance customer communications during weather events, aiming to improve service reliability and operational efficiency. These developments reflect CenterPoint Energy’s strategic focus on growth and customer engagement.
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