Cautious Hold Rating for Centerpoint Energy Amid Uncertainty in System Resiliency Plan and Financial Position

Bank of America Securities analyst Ross Fowler maintained a Hold rating on Centerpoint Energy (CNP – Research Report) yesterday and set a price target of $39.00.

Ross Fowler has given his Hold rating due to a combination of factors surrounding Centerpoint Energy’s current financial and strategic position. The company has recently reached a preliminary agreement on its System Resiliency Plan (SRP), which involves significant capital investment aimed at enhancing electric service reliability. However, the specifics of the settlement are yet to be disclosed, leaving some uncertainty about the financial implications.
Despite the potential for organic growth, the company’s valuation is already high, and its balance sheet remains relatively weak compared to peers. Additionally, there is some uncertainty regarding how the transmission investments will be handled, as they may be removed from the SRP and recovered through traditional cost mechanisms. These factors contribute to a cautious outlook, justifying a Hold rating until more clarity is provided on the settlement details and financial recovery options.

In another report released on May 17, J.P. Morgan also maintained a Hold rating on the stock with a $39.00 price target.

Based on the recent corporate insider activity of 44 insiders, corporate insider sentiment is neutral on the stock.