Allete (ALE) AI Stock Analysis

• Market Cap: $3.76B
• Dividend Yield: 4.51%
• Average Volume (3M): 377.47K
• Price to Earnings (P/E): 20.3
• Beta (1Y): 0.13
• Revenue Growth: -11.15%
• EPS Growth: -23.41%
• Country: US
• Employees: 1,595
• Sector: Utilities
• Sector Strength: 66
• Industry: Diversified Utilities
• EPS (TTM): 1.01
• Shares Outstanding: 57,982,334
• 10 Day Avg. Volume: 454,601
• 30 Day Avg. Volume: 377,468
• PEG Ratio: -1.01
• Price to Book (P/B): 1.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.51K
• Enterprise Value/Market Cap: 1.46
• Enterprise Value/Revenue: 0.89
• Enterprise Value/Gross Profit: 12.50
• Enterprise Value/Ebitda: 2.85
• 1Y Price Target: $67.00
• Price Target Upside: 3.30% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 67 Neutral
• Price Target: $70.00 ▲(7.92%Upside)

Allete's overall stock score reflects a stable financial performance with strong margins and balanced leverage but faces challenges in revenue growth. Technical analysis shows a neutral trend, while valuation metrics suggest slight overvaluation offset by a high dividend yield. The lack of recent earnings call data means no immediate insights can be derived from management's guidance or sentiment.

Allete Business Overview & Revenue Model

Company Description

Allete, Inc. (ALE) is a diversified energy company headquartered in Duluth, Minnesota. The company operates primarily through its subsidiaries in the utility, energy infrastructure, and renewable energy sectors. Allete's key businesses include Minnesota Power, which provides electricity to retail customers in northeastern Minnesota, and Allete Clean Energy, which focuses on developing, acquiring, and operating clean and renewable energy projects across North America. The company's operations are centered on delivering reliable energy solutions while promoting sustainability and innovation in the energy sector.

How the Company Makes Money

Allete generates revenue through several key streams. The primary source is its regulated utility operations under Minnesota Power, which supplies electricity to residential, commercial, and industrial customers. Revenue in this segment is largely driven by regulated rates approved by the Minnesota Public Utilities Commission, ensuring a stable income flow. Additionally, Allete Clean Energy contributes to earnings by developing and operating wind and solar energy projects, selling generated power through long-term contracts with utilities and other entities. The company's revenue model is further supported by strategic partnerships and investments in energy-related infrastructure, which enhance its capacity to deliver clean energy solutions. These efforts are aligned with broader industry trends towards sustainability and renewable energy adoption.

Allete Financial Statement Overview

Summary

Allete presents a stable financial profile with healthy margins and a strong balance sheet. However, revenue growth is a concern due to recent declines. Cash flow generation is strong, yet the free cash flow position needs improvement for sustainable growth.

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	440.30M	1.17B	489.90M	446.80M	453.50M	424.80M
EBITDA	466.70M	486.30M	539.40M	417.50M	411.70M	405.50M
Net Income	184.70M	179.30M	247.10M	131.30M	169.20M	174.20M
Balance Sheet
Total Assets	6.87B	6.75B	6.66B	6.85B	6.43B	6.08B
Cash, Cash Equivalents and Short-Term Investments	92.00M	32.80M	71.90M	36.40M	45.10M	44.30M
Total Debt	1.93B	1.80B	1.79B	1.93B	1.99B	1.82B
Total Liabilities	3.48B	3.36B	3.25B	3.50B	3.49B	3.28B
Stockholders Equity	2.87B	2.85B	2.81B	2.69B	2.41B	2.29B
Cash Flow
Free Cash Flow	58.50M	102.20M	314.10M	800.00K	-209.80M	-418.00M
Operating Cash Flow	507.20M	457.10M	585.30M	221.30M	263.50M	299.80M
Investing Cash Flow	-438.70M	-340.70M	-283.60M	-384.00M	-485.20M	-812.80M
Financing Cash Flow	-14.40M	-140.60M	-262.50M	155.20M	204.20M	485.70M

Allete Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 64.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 64.86 is above the 20-day moving average (MA) of 64.50, above the 50-day MA of 64.74, and above the 200-day MA of 63.81, indicating a bullish trend. The MACD of -0.12 indicates Negative momentum. The RSI at 56.42 is Neutral, neither overbought nor oversold. The STOCH value of 96.22 is Negative, 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	73 Outperform	$3.34B	11.35	18.38%	2.63%	-2.68%	-3.73%
AVA	72 Outperform	$3.09B	16.34	7.25%	5.11%	3.14%	-2.66%
MGEE	69 Neutral	$3.29B	25.49	10.62%	2.00%	6.03%	6.15%
NWE	68 Neutral	$3.22B	13.65	8.27%	5.03%	4.31%	19.33%
ALE	67 Neutral	$3.76B	20.35	6.49%	4.51%	-11.15%	-23.41%
BKH	67 Neutral	$4.13B	14.53	8.02%	4.75%	3.28%	-3.49%
Sector *	67 Neutral	$16.52B	17.14	4.47%	3.56%	4.76%	6.13%

Allete Corporate Events

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.

Allete Appoints Colin Anderson as Chief Accounting Officer

On April 16, 2025, Colin B. Anderson was appointed as ALLETE’s Vice President, Chief Accounting Officer, and Controller. Anderson, who has been with the company since 2021, previously served as Controller and Vice President – ALLETE Tax and Rates. His compensation includes a base salary of $311,725 and a long-term incentive plan opportunity of $125,000, with a mix of restricted stock units and performance share awards. Anderson’s appointment follows the retirement announcement of Steven W. Morris, who remains a Senior Vice President until his planned retirement on July 18, 2025.