CenterPoint Energy, Inc. (CNP), headquartered in Houston, Texas, engages in the business of power generation and distribution. Valued at $16.4 billion by market cap, it conducts activities in electricity transmission and distribution, natural gas distribution, interstate pipeline and gathering operations, and power generation.
Shares of this leading electricity and natural gas provider have struggled to keep up with the broader market over the past year. CNP has declined 11.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 15.1%. In 2024, CNP stock is down 10.3%, while the SPX is up 9% on a YTD basis.
Narrowing the focus, CNP’s underperformance is also apparent compared to the Utilities Select Sector SPDR Fund (XLU). The exchange-traded fund has gained about 14.5% over the past year. The ETF’s 15.7% gains on a YTD basis outshine the stock’s low-double-digit losses over the same time frame.
On Jul. 30, CNP shares closed down more than 2% after reporting its Q2 results. Its EPS of $0.36 exceeded Wall Street expectations of $0.33. The company’s revenue was $1.91 billion, topping Wall Street forecasts of $1.88 billion. CNP reaffirmed its fiscal 2024 earnings guidance and continues to expect adjusted EPS to be between $1.61 and $1.63.
For the current fiscal year, ending in December, analysts expect CNP to report an EPS growth of 8% to $1.62 on a diluted basis. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.
Among the 14 analysts covering CNP stock, the overall consensus is a “Hold,” a step down from “Moderate Buy” from a month ago. That’s based on three “Strong Buy” ratings, one “Moderate Buy,” nine “Holds,” and one “Strong Sell.”
This configuration is less bullish than a month ago, with six suggesting a “Strong Buy” and two advising a “Moderate Buy.”
On Aug. 2, JPMorgan Chase & Co. (JPM) downgraded CNP from “Overweight” to “Neutral” rating and declined the price target to $29 from $32, implying a potential upside of 13.1% from current levels.
The mean price target of $30.15 represents a 17.6% premium to CNP’s current price levels. The Street-high price target of $34 suggests an upside potential of 32.7%.
On the date of publication, Neha Panjwani 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.
