Scotiabank raises WEC Energy target to $115, maintains rating

Wednesday, Scotiabank (TSX:BNS) analysts increased their price target on shares of WEC Energy Group (NYSE: NYSE:WEC) to $115 from the previous $110, while maintaining a Sector Outperform rating. The utility giant, currently valued at $35 billion, is trading near its 52-week high of $111, having delivered an impressive 35.8% return over the past year. Analyst Andrew Weisel expressed continued confidence in the company as a leading choice within the U.S. utilities sector, citing its potential for above-average earnings and dividend growth as key factors. According to InvestingPro analysis, WEC appears to be trading above its Fair Value, suggesting investors should carefully consider entry points.

Weisel highlighted WEC Energy’s consistent performance and its ability to navigate the current uncertain macroeconomic climate. He pointed to the company’s strong first quarter results for 2025, where WEC Energy reported earnings per share (EPS) of $2.27, surpassing both Scotiabank’s estimate of $2.21 and the consensus estimate of $2.18. This performance, according to Weisel, is indicative of a positive outlook for the full year 2025. InvestingPro data reveals WEC’s impressive track record of maintaining dividend payments for 55 consecutive years, with a current yield of 3.25% and dividend growth of 6.89% over the last twelve months.

The company’s robust data center exposure and generally favorable regulatory environments were also noted as contributing to its attractive risk-adjusted growth outlook. Despite concerns regarding a potential slowdown in data center growth, Weisel believes WEC Energy is well-positioned and has taken a conservative approach in forecasting load growth acceleration.

Furthermore, Weisel anticipates that WEC Energy may announce a significant capital expenditure increase in the next six months. Such a development could act as a catalyst for the stock, potentially leading to positive revisions in earnings estimates or, at the very least, offering greater visibility into the company’s long-term growth sustainability.

In conclusion, based on these factors, Weisel argues that WEC Energy’s stock deserves a larger relative price-to-earnings (P/E) premium than the current approximately 10%. The revised price target of $115 reflects this belief in the stock’s value and its prospects for continued growth. Currently trading at a P/E ratio of 21.15x, WEC has demonstrated strong price momentum with a 17.7% year-to-date return. For deeper insights into WEC’s valuation and growth prospects, including exclusive ProTips and comprehensive financial analysis, check out the detailed Pro Research Report available on InvestingPro.

In other recent news, WEC Energy Group reported impressive first-quarter earnings for 2025, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $2.27, exceeding the forecasted $1.97, and recorded a revenue of $3.15 billion, which was higher than the projected $2.87 billion. WEC Energy reaffirmed its earnings guidance for 2025, projecting EPS between $5.17 and $5.27. The company continues to invest significantly in renewable energy projects, including the Darien Solar project, and anticipates further growth from upcoming projects like Koshkonen and Renegade. Additionally, WEC Energy plans to issue $700-800 million in common equity to support its capital investment plans. On the analyst front, there were no specific upgrades or downgrades mentioned, but firms like Jefferies and Scotiabank engaged with the company on various strategic initiatives during the earnings call. The company remains focused on reliability, financial discipline, and customer satisfaction, with ongoing efforts to address tariff impacts and regulatory changes.

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