Analyst Julien Dumoulin Smith from Jefferies maintained a Buy rating on CMS Energy (CMS – Research Report) and increased the price target to $83.00 from $77.00.
Julien Dumoulin Smith has given his Buy rating due to a combination of factors that suggest CMS Energy is well-positioned to navigate current and future challenges. The company has a robust pipeline of approximately 9 GW of load growth, which provides a buffer against potential risks associated with the Inflation Reduction Act (IRA) and tariff negotiations. Additionally, CMS Energy’s recent positive outcome in the electric rate case has alleviated previous regulatory concerns in Michigan, enhancing the company’s stability and growth prospects.
Despite uncertainties in Michigan’s energy landscape, CMS Energy is seen as having multiple strategies to manage these challenges effectively. The company’s planned retirement of its last coal power plant aligns with Michigan’s clean energy targets, and while there are potential disruptions from IRA reforms and coal industry executive orders, these are expected to have minimal impact on CMS’s current guidance. Furthermore, the successful resolution of their data center tariff rate filing could further boost load growth, supporting the company’s financial outlook and justifying the Buy rating.
Dumoulin Smith covers the Utilities sector, focusing on stocks such as Hawaiian Electric, Alliant Energy, and American Water. According to TipRanks, Dumoulin Smith has an average return of 2.3% and a 53.09% success rate on recommended stocks.
In another report released on April 17, J.P. Morgan also maintained a Buy rating on the stock with a $80.00 price target.