With a market cap of $21.1 billion, PPL Corporation (PPL) is an energy company that focuses on providing electricity and natural gas across the U.S. and the UK. Based in Allentown, Pennsylvania, it operates through its Kentucky Regulated and Pennsylvania Regulated segments, delivering electricity and natural gas in various states and generating electricity from power plants primarily in Kentucky.
Shares of the energy and utility holding company have significantly underperformed the broader market over the past 52 weeks. PPL has gained 10.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 24.8%. In 2024, PPL stock is up 6.2%, compared to SPX's 10% gains on a YTD basis.
Zooming in further, PPL is slightly lagging behind the S&P 500 Utilities Sector SPDR's (XLU) 11.2% gains over the past 52 weeks.
PPL Corporation's underperformance could be due to investor worries about regulatory hurdles, economic uncertainties affecting demand, and competitive pressures within the utility sector, coupled with strategic decisions perceived negatively by investors.
However, the stock surged nearly 2% on May 1 after the company reported better-than-expected Q1 earnings results, driven by higher transmission revenue, increased sales volumes, and lower operating costs. Also, it announced deals to add more than three gigawatts of data center capacity in Pennsylvania.
For the current fiscal year, ending in December, analysts expect PPL's EPS to grow by 6.9% to $1.71. The company's earnings surprise history is mixed. It beat the consensus forecast in two of the past four quarters while missing on two other occasions.
Among the 13 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings, two “Moderate Buys,” and four “Holds.”
This configuration is more bullish than three months before, with six analysts suggesting a "Strong Buy."
On May 28, Morgan Stanley (MS) analyst David Arcaro maintained a "Strong Buy" rating and raised the price target for PPL by 6.7% to $32 (the Street-high price target), driven by a thorough analysis of its Power & Utilities portfolio's outperformance against the S&P amid broader market challenges. That implies a potential upside of 12% from the current price levels.
The mean price target of $29.83 represents a premium of just 4.5% to PPL's current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
