Xcel Energy, the Utilities sector company, was revisited by a Wall Street analyst yesterday. Analyst William Appicelli from UBS maintained a Hold rating on the stock and has a $82.00 price target.
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William Appicelli has given his Hold rating due to a combination of factors surrounding Xcel Energy’s recent developments and financial outlook. The company’s resolution of the Marshall fire litigation, with a settlement of $290 million net of insurance, is seen as favorable and allows investors to refocus on the company’s strong fundamentals. Despite this positive development, the overall impact on earnings per share is expected to be minimal, with a projected -$0.03/share impact that the company can offset elsewhere.
Appicelli’s decision to maintain a Hold rating is also influenced by Xcel Energy’s projected earnings growth, which is anticipated to be in the upper half of their 6-8% guidance range. The price target for XEL has been adjusted to $82, reflecting the removal of a 2% wildfire discount, yet the stock is still rated at a +7% premium compared to the utility average. This premium accounts for Xcel’s first quartile EPS growth and other valuation factors, but the regulatory environment remains a concern, contributing to the Hold rating.
XEL’s price has also changed moderately for the past six months – from $68.860 to $77.930, which is a 13.17% increase.