Black Hills, the Utilities sector company, was revisited by a Wall Street analyst today. Analyst Ross Fowler from Bank of America Securities reiterated a Sell rating on the stock and has a $57.00 price target.
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Ross Fowler has given his Sell rating due to a combination of factors impacting Black Hills Corporation. Despite the company’s Q2 earnings slightly surpassing expectations, the overall financial outlook remains challenging. The company faces increased financing costs and operational expenses, which are partially offsetting its earnings growth. Additionally, while management is optimistic about achieving the higher end of its long-term EPS growth targets, the need for substantial capital investments to support planned load growth could strain the company’s balance sheet further.
Fowler also highlights the potential dilution of earnings per share due to anticipated equity issuances and significant debt refinancing requirements through 2028. These financial pressures, coupled with the necessity to improve return on equity to meet growth targets, contribute to a cautious outlook. Although Black Hills is making progress on major capital projects, the financial implications of these initiatives and the current tight balance sheet underpin the Sell rating.