Valued at a market cap of $45.7 billion, Dominion Energy, Inc. (D) is a leading energy company that produces, transmits, and distributes electricity and natural gas across 18 U.S. states. With a diverse portfolio of nearly 29.5 GW of electric generating capacity and extensive transmission and distribution infrastructure, it serves approximately 7.5 million customers.
Shares of the energy company have slightly outperformed the broader market over the past 52 weeks. Dominion Energy stock has returned 22.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 21.4%. However, shares of D are up over 1% on a YTD basis, lagging behind SPX's 3.1% gain.
Looking closer, the Richmond, Virginia-based company has underperformed the Utilities Select Sector SPDR Fund's (XLU) 29.9% return over the past 52 weeks.
Despite reporting better-than-expected Q3 adjusted EPS of $0.98, shares of Dominion Energy fell marginally on Nov. 1 as its revenue of $3.9 billion missed the consensus estimate. Investors were also cautious about the company's rising long-term debt, which increased to $33.8 billion. Additionally, Dominion narrowed its full-year EPS guidance to $2.68 - $2.83, maintaining a midpoint of $2.75, which was slightly below analysts' expectations.
Moreover, the stock dropped 4.2% on Feb. 4 after announcing a 9% cost increase for its Coastal Virginia Offshore Wind (CVOW) project, raising total expenses to $10.7 billion due to higher network upgrade costs mandated by PJM. Investors also reacted negatively to the $100 million GAAP charge for unrecovered costs.
For fiscal 2024, which ended in December, analysts expect D's EPS to grow 38.7% year-over-year to $2.76. The company's earnings surprise history is mixed. It beat the consensus estimates in two of the last four quarters while missing on two other occasions.
Among the 18 analysts covering the stock, the consensus rating is a “Hold.” That’s based on three “Strong Buy” ratings and 15 “Holds.”
On Feb. 3, Bank of America Securities analyst Ross Fowler reaffirmed a “Hold” rating on Dominion Energy and set a price target of $61.
As of writing, D is trading below the mean price target of $59.27. The Street-high price target of $66 implies a potential upside of 20.8%.
