UBS analyst William Appicelli upgraded the rating on Evergy (EVRG – Research Report) to a Buy today, setting a price target of $78.00.
William Appicelli has given his Buy rating due to a combination of factors that suggest a positive outlook for Evergy. The company is expected to benefit from a more favorable regulatory environment in Missouri and a potentially less punitive valuation in Kansas, where the stock is currently undervalued by about 24%. Appicelli anticipates Evergy’s earnings per share to grow between 5-7%, which is above the current guidance of 4-6%, with potential for an upward revision in the near future.
Additionally, the stabilization of the regulatory environment in Kansas is crucial for investor confidence. Evergy’s stock is trading at a 9% discount based on the new 2027 EPS estimate of $4.55, indicating room for valuation improvement. The ongoing Kansas rate case, with a more supportive regulatory stance, could further enhance the company’s ability to attract capital for its significant future investments. The planned construction of two combined cycle gas turbines in Kansas, despite cost inflation, is seen as a constructive step that reduces risks associated with capital expenditure plans.
In another report released on April 22, Barclays also maintained a Buy rating on the stock with a $73.00 price target.