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Introduction & Market Context
PPL Corporation (NYSE:PPL) presented its first quarter 2025 results on April 30, showing solid performance and maintaining its full-year guidance. The utility company, which operates regulated businesses in Kentucky, Pennsylvania, and Rhode Island, reported growth in ongoing earnings while highlighting expanding opportunities in data center infrastructure investments. PPL shares closed at $36.39 on April 29, near their 52-week high of $36.66, reflecting investor confidence in the company’s growth strategy.
Quarterly Performance Highlights
PPL reported Q1 2025 GAAP earnings of $0.56 per share, compared to $0.42 in the same period last year. Ongoing earnings, which exclude special items, reached $0.60 per share, an 11% increase from $0.54 in Q1 2024. The company reaffirmed its 2025 ongoing earnings forecast range of $1.75-$1.87 per share, with a midpoint of $1.81.
As shown in the following financial overview, all regulated segments except Rhode Island contributed to the earnings growth:
The earnings improvement was primarily driven by favorable weather conditions and increased transmission revenue. A detailed breakdown of the factors contributing to the $0.06 per share increase in ongoing earnings is illustrated in this waterfall chart:
"We’re off to a solid start in 2025," said Vince Sorgi, President and CEO. The company remains on track to complete approximately $4.3 billion of capital investments and achieve at least $150 million of cumulative O&M savings in 2025.
Data Center Growth Opportunities
A significant highlight of PPL’s presentation was the expanding data center opportunities across its service territories. In Pennsylvania, the company reported nearly 11GW of data center requests in advanced stages, up from approximately 9GW previously reported. This represents potential transmission capital investment of $700-$850 million, with $400 million already reflected in the company’s capital expenditure plan.
The following chart illustrates the growing data center demand in PPL’s Pennsylvania and Kentucky service territories:
In Kentucky, PPL announced the state’s first 400MW hyperscale data center campus in Louisville, with active data center requests approaching 6GW for the 2026-2034 period. The company noted that the passage of Kentucky’s HB775 extends sales and use tax exemptions for qualified data centers across the Commonwealth, which should further stimulate growth in this sector.
Capital Investment Plan & Rate Base Growth
PPL outlined its $20 billion capital investment plan through 2028, designed to modernize infrastructure, enhance reliability, and support clean energy transition. The investments are expected to drive an average annual rate base growth of 9.8% through 2028.
The following chart details PPL’s capital investment plan by year and segment:
This substantial investment is projected to increase PPL’s rate base from $26.5 billion in 2024 to $38.6 billion by 2028, as illustrated in this breakdown:
The company highlighted that approximately 60% of its capital investment plan is subject to reduced regulatory lag through mechanisms such as formula rates, trackers, and forward test years in all three jurisdictions.
Financial Outlook & Balance Sheet Strength
PPL emphasized its strong financial position, featuring premier credit ratings (Baa1 at Moody’s and A- at S&P) that provide flexibility to support its growth plans. The company established a $2 billion at-the-market (ATM) equity program in February 2025, with approximately $170 million of equity already issued.
The following slide illustrates PPL’s balance sheet strength and debt maturity profile:
Management reaffirmed its long-term financial targets, including:
- 6-8% annual EPS growth through at least 2028 (expecting to be in the top half of the range)
- 6-8% annual dividend growth through at least 2028
- 16-18% FFO/CFO to debt ratio throughout the plan
Strategic Initiatives
PPL’s presentation highlighted several key strategic initiatives and regulatory developments supporting its growth plan:
1. In Kentucky, the company filed for Certificate of Public Convenience and Necessity in February 2025 for new generation capacity, including two 645MW natural gas combined-cycle units, 400MW of battery storage, and environmental controls for its coal fleet.
2. The Kentucky Public Service Commission approved cost recovery for the retirement of the Mill Creek 1 coal unit via the Retired Asset Recovery Rider, allowing recovery of $125 million over ten years.
3. In Pennsylvania, PPL received approval to increase its Distribution System Improvement Charge revenue cap to 7.5% (up from 5%), supporting infrastructure investments through 2027.
4. Rhode Island regulators approved nearly $400 million for Infrastructure, Safety and Reliability plans, including investments in advanced metering and gas distribution systems.
The company’s overall investment strategy is focused on creating "utilities of the future" through grid modernization, clean energy transition, operational efficiencies, and digital customer solutions, as illustrated in this strategic framework:
With its strong Q1 2025 performance, significant data center growth opportunities, and substantial capital investment plan, PPL appears well-positioned to deliver on its long-term financial targets while supporting the energy transition and grid modernization across its service territories.
Full presentation:
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