Constructive Regulatory Outlook and Earnings Growth Support Buy Rating on CMS Energy

Bank of America Securities analyst Ross Fowler has reiterated their bullish stance on CMS stock, giving a Buy rating on January 28.

Ross Fowler has given his Buy rating due to a combination of factors tied to both regulatory outlook and earnings trajectory. He views the administrative law judge’s proposed 8.2% allowed ROE as poorly supported and inconsistent with past Michigan decisions, the evidentiary record, and regulatory staff recommendations. Based on historical Commission behavior and prevailing authorized returns, he expects the final ROE to land much closer to the high‑9% range, implying a more constructive regulatory outcome than the PFD suggests. This anticipated resolution reduces downside risk from the current rate case and supports the company’s long‑term return profile.
Fowler also points to solid fundamentals, with his Q4 2025 EPS estimate of $0.93 and full‑year 2025 EPS estimate of $3.59 both aligned with consensus and representing healthy growth from 2024. He expects management to reaffirm a 6–8% annual earnings growth target, with an emphasis toward the upper end, underpinned by an updated five‑year capital plan. In addition, he raises his price objective to $82, reflecting higher sector valuation multiples for electric and gas peers, which provide further upside from the current share price. Taken together, regulatory support, earnings growth visibility, and an attractive valuation underpin his conviction in maintaining a Buy rating on CMS Energy.

In another report released on January 28, Jefferies also maintained a Buy rating on the stock with a $81.00 price target.