Allete (ALE) AI Stock Analysis

• Market Cap: $3.82B
• Dividend Yield: 4.4%
• Average Volume (3M): 635.06K
• Price to Earnings (P/E): 20.8
• Beta (1Y): 0.10
• Revenue Growth: -0.44%
• EPS Growth: -17.46%
• Country: US
• Employees: 1,595
• Sector: Utilities
• Sector Strength: 84
• Industry: Diversified Utilities
• EPS (TTM): 0.61
• Shares Outstanding: 58,035,362
• 10 Day Avg. Volume: 583,688
• 30 Day Avg. Volume: 635,057
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.62
• Enterprise Value/Revenue: 4.02
• Enterprise Value/Gross Profit: 14.40
• Enterprise Value/Ebitda: 12.68
• 1Y Price Target: $70.00
• Price Target Upside: 7.73% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 62 Neutral
• Price Target: $70.00 ▲(7.73% Upside)

Allete's overall stock score is driven by strong financial performance and positive corporate events. However, concerns about cash flow management and the lack of technical analysis data weigh on the score. The valuation is reasonable, supported by a solid dividend yield.

Allete Business Overview & Revenue Model

Company Description

ALLETE, Inc. operates as an energy company. The company operates through Regulated Operations, ALLETE Clean Energy, and Corporate and Other segments. It generates electricity from coal-fired, biomass co-fired / natural gas, hydroelectric, wind, and solar. The company provides regulated utility electric services in northwestern Wisconsin to approximately 15,000 electric customers, 13,000 natural gas customers, and 10,000 water customers, as well as regulated utility electric services in northeastern Minnesota to approximately 145,000 retail customers and 15 non-affiliated municipal customers. It also owns and maintains electric transmission assets in Wisconsin, Michigan, Minnesota, and Illinois. In addition, the company focuses on developing, acquiring, and operating clean and renewable energy projects; and owns and operates approximately 1,000 megawatts of wind energy generation facility. Further, it is involved in the coal mining operations in North Dakota; and real estate investment activities in Florida. The company owns and operates 158 substations with a total capacity of 10,066 megavolt amperes. It serves taconite mining, paper, pulp and secondary wood products, pipeline, and other industries. The company was formerly known as Minnesota Power, Inc. and changed its name to ALLETE, Inc. in May 2001. ALLETE, Inc. was incorporated in 1906 and is headquartered in Duluth, Minnesota.

How the Company Makes Money

Allete generates revenue primarily through the sale of electricity to its residential, commercial, and industrial customers. The utility operations, particularly through Minnesota Power, account for a significant portion of its revenue, driven by regulated rates set by state utility commissions. Additionally, Allete earns money from its renewable energy initiatives, including wind and solar projects, which contribute to both energy sales and potential tax credits or incentives. The company also generates revenue from its real estate operations and energy services, diversifying its income streams. Strategic partnerships with renewable energy developers and investments in infrastructure projects further bolster Allete's earnings, aligning with the growing demand for sustainable energy solutions.

Allete Financial Statement Overview

Summary

Allete displays stable financial health with healthy margins and a strong balance sheet, though recent revenue declines are a concern. Cash flow generation is robust, but free cash flow growth is inconsistent, necessitating improved cash retention strategies.

Income Statement

The income statement shows moderate profitability with a gross profit margin of 28.8% and a net profit margin of 12.1% for the TTM. Revenue has seen fluctuations, with a notable decrease in the last period, impacting the overall growth trajectory. EBIT and EBITDA margins are healthy at 10.9% and 30.6% respectively, indicating efficient operations and strong earnings capacity.

Balance Sheet

The balance sheet reveals a stable financial position with a debt-to-equity ratio of 0.67, indicating a balanced leverage approach. Return on Equity stands at 6.4% for the TTM, reflecting moderate returns for shareholders. The equity ratio is solid at 41.8%, suggesting a strong asset base supported by equity.

Cash Flow

Cash flow analysis highlights a positive operating cash flow to net income ratio of 2.75, showcasing robust cash generation capabilities. However, free cash flow growth has been inconsistent, with a recent decline. The free cash flow to net income ratio of 0.32 indicates a need for improved cash retention strategies.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.53B	1.53B	1.88B	1.57B	1.42B	1.17B
Gross Profit	428.20M	497.00M	489.90M	446.80M	453.50M	424.80M
EBITDA	486.60M	486.30M	539.40M	417.50M	411.70M	405.50M
Net Income	183.60M	179.30M	247.10M	131.30M	169.20M	174.20M
Balance Sheet
Total Assets	6.91B	6.75B	6.66B	6.85B	6.43B	6.08B
Cash, Cash Equivalents and Short-Term Investments	55.40M	32.80M	71.90M	36.40M	45.10M	44.30M
Total Debt	2.00B	1.80B	1.79B	1.93B	1.99B	1.82B
Total Liabilities	3.55B	3.36B	3.25B	3.50B	3.49B	3.28B
Stockholders Equity	2.86B	2.85B	2.81B	2.69B	2.41B	2.29B
Cash Flow
Free Cash Flow	-53.40M	102.20M	314.10M	800.00K	-209.80M	-418.00M
Operating Cash Flow	430.20M	457.10M	585.30M	221.30M	263.50M	299.80M
Investing Cash Flow	-469.70M	-340.70M	-283.60M	-384.00M	-485.20M	-812.80M
Financing Cash Flow	53.70M	-140.60M	-262.50M	155.20M	204.20M	485.70M

Allete Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 64.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALE, the sentiment is Positive. The current price of 64.98 is below the 20-day moving average (MA) of 65.11, above the 50-day MA of 64.53, and above the 200-day MA of 63.65, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 51.38 is Neutral, neither overbought nor oversold. The STOCH value of -22.13 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALE.

Allete Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OTTR	77 Outperform	$3.44B	12.08	17.13%	2.49%	-3.69%	-8.25%
NWE	74 Outperform	$3.44B	15.25	7.93%	4.73%	3.78%	7.48%
BKH	72 Outperform	$4.49B	15.53	8.13%	4.30%	5.41%	-1.89%
AVA	72 Outperform	$3.04B	16.82	6.91%	5.15%	2.41%	-9.85%
MGEE	69 Neutral	$3.09B	23.51	10.75%	2.14%	8.47%	12.76%
ALE	62 Neutral	$3.82B	20.77	6.46%	4.40%	-0.44%	-17.46%
Sector *	61 Neutral	£7.21B	5.33	11.07%	5.27%	4.13%	-72.10%

Allete Corporate Events

Allete Issues $250 Million in Mortgage Bonds

On July 9, 2025, ALLETE, Inc. issued $250 million in first mortgage bonds to institutional buyers in the private placement market. The proceeds from these bonds, which have varying maturity dates and interest rates, will be used to fund utility capital expenditures, potentially strengthening ALLETE’s operational capabilities and market position.

The most recent analyst rating on (ALE) stock is a Hold with a $67.00 price target. To see the full list of analyst forecasts on Allete stock, see the ALE Stock Forecast page.

Allete Holds 2025 Annual Shareholders Meeting

ALLETE, Inc. held its 2025 annual meeting of shareholders on May 13, 2025, where several key decisions were made. All nominees for director were elected, and the advisory vote to approve executive compensation was passed. Additionally, the ALLETE Executive Long-Term Incentive Compensation Plan was approved, and an amendment to the company’s Articles of Incorporation related to Serial Preferred Stock A was ratified. Furthermore, PricewaterhouseCoopers LLP was confirmed as the company’s independent registered public accounting firm for 2025.

The most recent analyst rating on (ALE) stock is a Hold with a $67.00 price target. To see the full list of analyst forecasts on Allete stock, see the ALE Stock Forecast page.