Ameren Corporation (AEE), headquartered in Saint Louis, Missouri, produces and distributes electricity and natural gas to its clients. With the market cap of $24 billion, the company produces energy with a net capacity of around 10,200 megawatts and possesses over 7,500 circuit miles of transmission lines.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and AEE definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the regulated electric utilities industry. AEE's commitment to offer reliable and affordable energy solutions has enhanced its efficiency. Ameren's growth strategy focuses on expanding its electric and transmission rate base, driving potential valuation premiums.
Despite its notable strength, AEE slipped 7.3% from its 52-week high of $95.69, achieved on Nov. 27. Over the past three months, AEE stock rose 3.8% outperforming the Utilities Select Sector SPDR Fund’s (XLU) 2.7% decline during the same time frame.
In the longer term, shares of AEE rose 22.7% on a YTD basis and climbed 23.7% over the past 52 weeks, outperforming XLU’s YTD gains of 21.6% and 20.4% returns over the last year.
To confirm the bullish trend, AEE is trading above its 200-day moving average since mid-July. However, despite the positive price momentum, the stock has been trading below its 50-day moving average recently.
AEE’s outperformance can be attributed to many factors including new electric rates, customer growth, cost control, and energy-efficiency initiatives. Strategic investments to upgrade electric infrastructure and shift to renewable energy sources have also contributed to its success.
On Nov. 6, AEE shares closed up marginally after reporting its Q3 results. Its adjusted EPS of $1.87 missed Wall Street expectations of $1.91. The company’s revenue was $2.17 billion, falling short of Wall Street forecasts of $2.21 billion. AEE expects full-year adjusted EPS to be between $4.55 and $4.69.
AEE’s rival, Dominion Energy, Inc. (D) shares lagged behind the stock, with a 13.9% uptick on a YTD basis and solid gains of 10.4% over the past 52 weeks.
Wall Street analysts are moderately bullish on AEE’s prospects. The stock has a consensus “Moderate Buy” rating from the 16 analysts covering it, and the mean price target of $91.21 suggests a potential upside of 2.8% from current price levels.
